Orange-Juice Futures Fall to 1-Year Low as Florida Weather Worries Subside

Orange-Juice Futures Fall to 1-Year Low as Florida Weather Worries Subside

Concerns ease about a frost possibly hurting the state’s crop

NEW YORK—Orange-juice futures sank to a low of more than one year Tuesday as concerns eased that a frost would hurt Florida’s orange crop.

Orange-juice prices typically rise in the winter on worries that freezing weather could harm orange production in the state. About 80% of the oranges used in U.S. juice are grown in Florida. The state last experienced a frost in January 2012, but a freeze hasn’t significantly damaged the state’s crops since December 1989, according to the Florida Department of Citrus.

“Once you get into late February, the fear of frost in south Florida goes away,” said Shawn Hackett, president of Hackett Financial Advisors, a brokerage and consulting firm in Boynton Beach, Fla. “Then the market heads south.”

The May contract for frozen, concentrated orange juice slid 1.6% to $1.2395 a pound on the ICE Futures U.S. exchange, the lowest closing price since Nov. 5, 2013. Prices are down 18% from their Dec. 12 peak, when investors bought futures in anticipation of winter. In addition to the potential for frost in Florida, winter brings an increase in orange-juice demand as consumers fight colds and flu.

In other markets, coffee and sugar futures lifted off recent lows as the Brazilian real strengthened. The dollar has gained 5.6% against the real this month, but it weakened 1.5% on Tuesday after Federal Reserve Chairwoman Janet Yellen testified before Congress. A stronger real makes it less profitable to export products from Brazil, the world’s largest producer of coffee and sugar.

The May arabica coffee contract rose 0.4% to $1.4890 a pound, while raw-sugar prices rose 0.1% to 14.15 cents a pound, snapping a four-day losing streak.

“Those two markets are so sensitive to the real,” Mr. Hackett said. “This was a relief rally today, but it’s hard to see it as much more than that.”

Cocoa prices rose for a 15th straight session, with the May contract settling up 0.5% at $3,017 a ton, the highest settlement since Oct. 24. The May cotton contract rose 1.1% to 64.91 cents a pound.

Published by

Pablo Grossi

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