Just about the time short sellers were bailing out of the rice market, a cyclone devastated Myanmar creating a huge humanitarian crisis, having struck the heart of that county’s rice producing region, destroying most of the paddy and last year’s rice stores. And Myanmar produced six million of the world’s 30 million metric tons. Jack Scoville, VP of Price Futures Group, says the situation in Myanmar and persistent rains in Arkansas have been floating the market. In June, he says support for the July contract is $20.50 per hundred weight, resistance is at $30. “Big prices mean big ranges,” he says.
Brandy R. Carroll, market analyst for the Arkansas Farm Bureau, says that according to the U.S. Department of Agriculture (USDA), world ending stocks will be much greater at the end of the 2008-2009 growing season, increasing to 82.58 million metric tons from 78.51 million metric tons. In the United States, production is projected to increase to 432 million metric tons, up from 427 million. She notes that in the May 9 USDA reports, Myanmar, formerly Burma, is listed with zero exports and imports. “That’s subject to change as we learn more about their situation,” she says, but for June she says support is at $20.63, the recent low, and resistance is at the previous high of $24.85.
