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"Rice, this year’s worst-performing grain, is set to rally as consumers and investors seek alternatives to wheat after heat waves, wildfires and floods ruined crops across the Northern Hemisphere.

The staple food for half the world tumbled 24 percent this year in Chicago trading while wheat as much as doubled since June. The last time the discount was this wide was in February 2008, two months before rice reached a record in a global food crisis that sparked riots from Haiti to Egypt. Drought in Thailand and flooding in Pakistan, representing a combined 43 percent of global exports, is also threatening supply.

“We’re very bullish and see the chance of a significant return,” said Jonathan Barratt, Sydney-based managing director at Commodity Broking Services Pty, which manages risk for agricultural growers and users. He is using warrants to bet on prices he says may climb 33 percent to $15 per 100 pounds by December, from $11.31 now. Wheat climbed 53 percent and corn 21 percent since Barratt said June 25 that grains were cheap.

The jump in prices may drive up rice as consumers lock in supplies, said Barratt. Drought and excessive rain have caused the destruction of as much as 21 percent of the combined wheat crops of Russia, Kazakhstan, Ukraine and Canada, according to Bloomberg calculations based on U.S. Department of Agriculture data. World rice use may climb 4 percent in 2010-2011, the USDA estimates, as an economic recovery boosts purchasing power. "

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