Rough-rice futures rose 7.2 percent to $15.935 per 100 pounds on the Chicago Board of Trade this year, trailing corn's 24 percent surge, the 32 percent rally in soybeans and wheat's 39 percent advance to a four-year high. The MSCI All-Country World Index of equities climbed 7.2 percent, while Treasuries returned 2.4 percent, a Bank of America Corp. index shows.

Thailand's reserves expanded after Prime Minister Yingluck Shinawatra began a policy in October of buying from farmers at above-market rates to boost rural incomes. Stockpiles may reach 12.1 million tons in 2012-2013, according to the USDA. The country may need to sell some inventory before the next crop is gathered in October and November, said Concepcion Calpe, a senior economist at the FAO. Thailand was the biggest shipper in the year to December with 10.6 million tons, or 30 percent of world trade, according to the International Grains Council.

Global production will expand 0.2 percent to 465.1 million tons in 2012-2013, a third consecutive record, as output reaches all-time highs in countries from China to Thailand to Vietnam, the USDA estimates. World reserves may touch 102 million tons by the end of the season, the most in at least five years, according to the London-based IGC.

Grain Reserves
That compares with an 11 percent drop in corn stockpiles and a 7.6 percent contraction in wheat inventories, the IGC said in a report July 26. Combined grain reserves will decline 7.9 percent to 337 million tons, the lowest since at least 2009.

The dry weather that's destroying corn, wheat and soybean crops and driving prices higher may extend to rice. The monsoon in India, which accounts for more than 70 percent of rainfall in the second-largest rice grower, has been 18 percent below the 50-year average since June 1, according to the India Meteorological Department. Farm Minister Sharad Pawar said the country may be facing a drought that's worse than in 1972, the Indian Express reported, citing his comments on Aug. 4.

The shortage of rain is similar to 2002, when India's rice output fell 23 percent, Espirito Santo Investment Bank Research said in a July 30 report. The government may restrict exports of the grain as well as wheat, sugar and cotton to ensure domestic supply, according to Espirito Santo. The USDA is predicting a 3.3 percent decline in the country's production to 100 million tons, and Food Minister K.V. Thomas said July 26 the government will refrain from banning shipments of food grains for now.

Eoin Treacy's view For the billions of people who regard rice as a staple food, the vacillation in its price is far more important that what happens to the US corn crop. At present the situation is finely balanced with bumper crops in some countries countering poor yields in others. Another major weather event would be required to push rice prices to the heights reached by other grains.

Rough rice contracts have rallied to test the psychological $16 area which has offered resistance on a number of occasions since 2009. A sustained move above that level would be required to begin to suggest a return to medium-term demand dominance.

Meanwhile corn, soybeans, oats and wheat have all at least paused following accelerated advances. Volatility has increased and sustained moves to new highs would be required to question current scope for some additional consolidation of recent gains.