Orange Juice Nearing Bear Market; Coffee, Cotton, Cocoa Decline

Orange-juice futures fell for an eighth straight session, approaching a bear market, on signs of slowing demand as investors shift money from commodities to equities. Coffee, cotton and cocoa also dropped. Sugar was little changed.

The Standard & Poor’s 500 Index of stocks rose to the highest since June 20 on speculation the Federal Reserve will maintain stimulus to fuel economic growth. The S&P GSCI Index of 24 commodities dropped for the first time this week, led by metals and agriculture. U.S. retail-sales of orange juice fell 1.3 percent to 39.89 million gallons (151 million liters) in the four weeks ended June 8, from a year earlier, the Florida Department of Citrus reported June 24.

“The consensus is the U.S. economy is turning a corner, and we had some weak demand reports for orange juice,” Fain Shaffer, the president of Infinity Trading Corp. in Medford, Oregon, said in a telephone interview. “People are taking their money out of commodities and putting it into stocks.”

Orange juice for September delivery tumbled 6 percent to $1.261 a pound at 1:09 p.m. on ICE Futures U.S. in New York, heading for the biggest decline for a most-active contract since Dec. 31. The commodity has dropped 14 percent since June 14, heading for the longest slump since July. Prices are down 18 percent from this year’s closing high on May 30, nearing the 20 percent threshold for a bear market.

Earlier today, orange juice touched $1.248, the lowest for a most-active contract since March 8. Trading was 288 percent above the average for this time in the past 100 days, according to data compiled by Bloomberg.

Before this month, prices rallied to a 13-month high of $1.5575 on May 30 as citrus disease and a drought eroded crop forecasts for Florida, the world’s second-largest producer.

Coffee, Cotton

Arabica-coffee futures for September delivery dropped 1.7 percent to $1.185 a pound on ICE, heading for the biggest decline since June 20, when prices fell to the lowest in almost four years.

Cotton futures for December delivery slumped 0.7 percent to 84.33 cents a pound.

Cocoa futures for September delivery fell 0.1 percent to $2,161 a metric ton.

Raw-sugar futures for October delivery was unchanged at 17.34 cents a pound on ICE. Yesterday, prices reached 17.49 cents, the highest for a most-active contract since May 13.

To contact the reporter on this story: Marley DelDuchetto in Chicago at mdelduchett2@bloomberg.net

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

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