May 28 (Bloomberg) -- Rice futures plunged by the exchange limit in Chicago for the third straight session as two Asian producers resumed exports and a report showed improved crop conditions in the U.S., the world's fourth-biggest supplier.

Cambodia lifted an export ban this week, and Vietnam said May 21 it will remove restrictions on new shipments in July. Rice, the main food for half the world, has dropped 26 percent since reaching a record last month on export curbs by China, Vietnam and India. Record prices for food, including wheat, corn and palm oil, have caused unrest from Haiti to Egypt.

``We will see more supplies in the coming months as producers in Southeast Asia harvest their crops,'' said Kazuhiko Saito, a strategist at Interes Capital Management Co. in Tokyo. ``Producers may try to sell as much as possible following record price levels.''

Rice futures for July delivery fell $1.15, or 5.9 percent, to $18.45 per 100 pounds on the Chicago Board of Trade, the lowest for a most-active contract since March 24. The price tumbled 12 percent in three sessions. Futures still have gained 75 percent in the past 12 months.

About 72 percent of the U.S. crop was in good or excellent condition in the week ended May 25, up from 65 percent a week earlier and 67 percent a year earlier, the Department of Agriculture said yesterday in a report. About 94 percent of the U.S. crop was seeded, compared with 84 percent a week earlier and 97 percent a year earlier.

`Improving Crop'

``The improving crop condition in the U.S. was another negative impact on the rice market,'' Saito said. Tumbling wheat prices also drove rice futures lower, Saito said.

Wheat touched $7.40 a bushel on May 23, the lowest since Aug. 29, and is down 45 percent from a Feb. 27 record of $13.495.

Farmers across Asia have boosted rice production to take advantage of higher prices. Global output of milled rice in 2008 will be 445.3 million metric tons, up 2.3 percent from last year's record 435.2 million tons, the Food and Agriculture Organization of the United Nations said on May 22.

Farmers in Vietnam's Mekong Delta, the nation's main rice- growing region, have chopped down sugar-cane plots, cleared shrimp ponds and removed orange trees in favor of rice, the Vietnam News said today.

Still, India has ``no proposal'' to end its ban on rice exports, Commerce Secretary G.K. Pillai said yesterday. The country may ship 50,000 tons in aid to Africa. India is the world's second-largest producer after China.

Japan's Prime Minister Yasuo Fukuda said today the government will work with other countries to double Africa's rice output over the next 10 years.

To contact the reporter for this story: Jae Hur in Singapore at jhur1@bloomberg.net

Last Updated: May 28, 2008 16:17 EDT