U.S. Commodities: Orange Juice Surges on Florida-Freeze Concern

Orange juice jumped to the highest price since May 2007 after Florida, the world’s second-biggest citrus grower, declared a state of emergency amid severe cold and the prospects of crop damage.

Governor Charles Crist said “extreme temperatures” threaten the state with a “major disaster.” Some areas may be subject to freezes through Dec. 15, Crist said in a statement on Dec. 10, citing National Weather Service forecasts. Prices jumped as much as 6.2 percent.

“This kind of temperature will freeze the fruit,” said Jimmy Tintle, an analyst at Transworld Futures in Tampa, Florida. “The market will remain bullish until we are able to ascertain the extent of damage.”

In other markets, sugar climbed to a one-month high on signs that heavy rains may limit supplies and reduce exports from India. Coffee also gained. The UBS Bloomberg Constant Maturity Commodity Index advanced 1.7 percent to 1,586.28. All 26 prices in the gauge rose.

Orange juice for January delivery jumped 6.35 cents, or 4 percent, to settle at $1.6695 a pound on ICE Futures U.S. in New York. Earlier, the price surged by the exchange limit of 10 cents to $1.706, the highest since May 9, 2007.

The commodity has gained 29 percent this year amid concern that adverse weather would damage Florida’s groves.

Sugar

Raw-sugar futures for March delivery rose 1.36 cents, or 4.7 percent, to settle at 30.49 cents a pound on ICE. Earlier, the price reached 30.53 cents, the highest since Nov. 11.

Production in India, the world’s second-biggest grower, will drop for a second consecutive year, ABN Amro Bank NV and VM Group said in a report on Dec. 10. A “terrible” monsoon in 2009 cut output, and this year, fields were flooded in areas such as Uttar Pradesh, according to the report. Prices have doubled since the end of May.

“The polls coming out on the Indian surplus are slowly reducing,” Jonathan Bouchet, an analyst at OTCex Group in Geneva, said in an e-mail. “Demand for Indian sugar remains strong.”

Coffee

Arabica coffee jumped the most in three weeks as excessive rain hurt crops in Colombia, the world’s second-largest grower.

Flooding has damaged roads and delayed agriculture shipments, a unit of the U.S. Department of Agriculture said on Dec. 10. The heavy rain from a La Nina weather pattern is forecast to last until the first quarter of 2011, according to the report. Prices have surged 60 percent this year, heading for the biggest annual gain since 1994.

“Fundamentals are very supportive,” said Tom Mikulski, a senior strategist at Lind-Waldock, a broker in Chicago. “Technically, coffee looks strong.”

Coffee futures for March delivery climbed 7.95 cents, or 3.8 percent, to $2.1755 a pound on ICE, the biggest gain since Nov. 18.

Commodities settled as follows:

Precious metals: February gold up $13.10 to $1,398 an ounce March silver up $1.019 to $29.624 an ounce January platinum up $22.00 to $1,697.30 an ounce March palladium up $19.75 to $752.45 an ounce

Livestock: February live cattle up 1 cent to $1.0495 a pound March feeder cattle up 1.25 cents to $1.199 a pound February lean hogs up 1.175 cents to 76.325 cents a pound February pork bellies up 0.25 cent to $1.0525 a pound

Grains: March soybeans up 29.5 cents to $13.12 a bushel March corn up 14.25 cents to $5.885 a bushel March wheat up 4.75 cents to $7.8025 a bushel March oats up 6 cents to $3.91 a bushel

Food and Fiber: March coffee up 7.95 cents to $2.1755 a pound March cocoa up $3 to $2,890 a metric ton March cotton up 4 cents to $1.4097 a pound March sugar up 1.36 cents to 30.49 cents a pound January orange juice up 6.35 cents to $1.6695 a pound

Energy: January crude oil up 82 cents to $88.61 a barrel January natural gas up 0.3 cent to $4.42 per million British thermal units January heating oil up 0.77 cent to $2.4652 a gallon January gasoline up 0.91 cent to $2.3184 a gallon

Others: March copper up 9.5 cents to $4.207 a pound March lumber down $1 to $285 per 1,000 board feet

To contact the reporter on this story: Debarati Roy in New York at droy5@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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