Rice is the staple food for the world’s two largest populations and fastest growing economies: India and China. Given this fact, it is unsurprising that the top three producers of rice in the world are China, India, and Indonesia, in that order. The term ‘rough rice’ refers to rice that has just come off the fields from harvest. Because it is such a necessity for literally billions of people, many traders and speculators find rough rice an attractive commodity to invest in.
|Rough Rice Futures Contract Specifications|
|Contract Size||2,000 hundredweights (CWT) (~ 91 Metric Tons)|
|Price Quotation||Cents per hundredweight|
|Grade And Quality||U.S. No. 2 or better long grain rough rice with a total milling yield of not less than 65% including head rice of not less than 48%. Premiums and discounts are provided for each percent of head rice over or below 55%, and for each percent of broken rice over or below 15%. No heat-damaged kernels are permitted in a 500-gram sample and no stained kernels are permitted in a 500-gram sample. A maximum of 75 lightly discolored kernels are permitted in a 500-gram sample.|
|Trading Hours||Sunday – Friday 7:00 p.m. – 7:45 a.m. CT and|
|Monday – Friday 8:30 a.m. – 1:20 p.m. CT|
|Minimum Price Fluctuation||1/2 cent per hundredweight ($10.00 per contract)|
|Product Code||CME Globex: ZR|
|CME ClearPort: 14|
|Listed Contracts||January (F), March (H), May (K), July (N), September (U) & November (X)|
|Last Trade Date||The business day prior to the 15th calendar day of the contract month.|
|Last Delivery Date||Seventh business day following the last trading day of the month.|
|Settlement Procedures||Rough Rice Futures Settlement Procedures|
|Exchange Rules||These contracts are listed with, and subject to, the rules and regulations of CBOT.|
|Source: CME Group|
According to the U.S. Department of Agriculture (USDA), rice farming is a high-cost, high-yielding, large-scale production section in the U.S. and depends on global markets for almost half its annual sales. The U.S. rice crop is grown in four regions across the country with three in the South and one in California. Each region specialize in their own type of rice grain that is described in length (long, medium, or short). There are four major types of rice that are produced worldwide:
- Indica – mainly grown in tropical and subtropical regions; accounts for over 75% of global trade
- Japonica – typically grown in regions with cooler climates; accounts for over 10% of global trade
- Aromatic – primarily jasmine from Thailand, and basmati from India and Pakistan; accounts for 12-13% of global trade sold at a premium
- Glutinous – mainly grown in Southeast Asia
The planting and harvesting season for U.S. rice begins in some regions in March, with some regions harvesting as late as November. All U.S. rice is grown in irrigated fields, which allows for some of the highest harvest yields in the world. The U.S. exports approximately half of their rice crop throughout the world, making up more than 10% of the total volume of global rice trade.
Last updated October 2015
Recent Posts on Rough Rice
- Turner’s Take | Ethanol and Corn (3/27/2020) - Farm Policy (Univ of IL) is estimating ethanol production will be down about 750mm gallons for March, April, and May. That is about 250mm bushel of corn lost from decreases in ethanol demand. There will probably be more demand lost in June/July/Aug to round out the marketing year. Right now we could be looking at 350mm to 400mm bushels of lost demand for 2019-2020 corn. The big concern is those bushels go right back into the ending stocks on the balance sheet.
- Beyond the Spotlight: March 23, 2020 (Rice, Cocoa, Cattle) (3/23/2020) - Beyond the Spotlight is a weekly video released on Mondays that spotlights two or three markets that may become trading opportunities for the week ahead. This enables you as a subscriber of the Trade Spotlight advisory service to look ahead with us, while potentially creating additional trading opportunities for yourself. The week’s video linked below… Read more.
- Turner’s Take | Fed Pledges Asset Repurchases with No Limit (3/23/2020) - The US Federal Reserve has pledged to buy assets with no limits. This is similar to the Fed support during the subprime crisis