Orange-juice futures rose to a two- week high on concern that storms may threaten groves in Florida, the world’s second-largest citrus producer. Cotton climbed.
Tropical Depression Beryl and Hurricane Bud “early in the season probably got people a little spooked,” said Michael McDougall, a senior vice president at Newedge Group in New York. The Atlantic hurricane season starts June 1. In the week ended May 22, hedge funds and speculators boosted bets on a price decline in orange juice to 1,100 futures and options contracts, the most since at least December 2009, government data showed.
Weather concerns “would be conducive for some short- covering,” McDougall said in a telephone interview.
Orange juice for July delivery surged 5 percent to $1.148 a pound at 11:18 a.m. on ICE Futures U.S. in New York. Earlier, the price reached $1.1735, the highest for a most-active contract since May 15. Brazil is the top grower.
Rain from Beryl, which spurred power outages after making landfall in northern Florida over the weekend, probably won’t have any significant impact on the state’s orange crop, Kyle Tapley, a meteorologist at Gaithersburg, Maryland-based MDA Information Systems Inc., said in an e-mail. Bud weakened off Mexico’s southwestern coast near Puerto Vallarta, according to the U.S. National Hurricane Center.
Other years with two storms forming before June 1 were 1908 and 1887, Tapley said.
Before today, orange juice dropped 35 percent this year, the biggest decline among 19 raw materials in the Thomson Reuters/Jefferies CRB Index.
Cotton futures for July delivery rose 1.3 percent to 74.51 cents a pound. Before today, the fiber plunged 20 percent this year, the second-biggest decline among 24 raw materials in the Standard & Poor’s GSCI Spot Index.
Before today, coffee dropped 26 percent in 2012. The GSCI index excludes orange juice.
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