Orange-juice futures may resume their rally this month as frigid weather threatens groves in Florida, the world’s second-biggest grower, a Bloomberg survey of analysts showed.
The price may reach $1.646 a pound by the end of the year on ICE Futures U.S. in New York, a gain of 5.9 percent from yesterday’s close, according to the average of seven estimates in the survey. The CHART OF THE DAY shows the percent change in orange-juice futures in 2004, 2007 and 2009 during the month of December as freezes threatened crops in Florida.
“We got our first cold snap down here,” which will lead to the seasonal “frost premium” for prices, Jimmy Tintle, an analyst at Transworld Futures, said yesterday from Tampa, Florida. Tintle correctly predicted in January that this year’s orange crop would be smaller than the government forecast.
Orange-juice futures plunged 5.4 percent in November as the six-month Atlantic hurricane season ended with no major crop damage in Florida. Prices rose 4.2 percent in the past two days and are up 20 percent this year. The commodity touched a three-year high of $1.657 on Sept. 22, partly on concern that a drought damaged crops in Brazil, the top grower.
“Next week, the cold is expected to penetrate further south across the Florida peninsula, increasing freeze threats for oranges, especially next Wednesday and Thursday,” Kyle Tapley, a meteorologist at MDA Information Systems Inc. in Rockville, Maryland, said in an e-mail yesterday.
Last year, orange juice advanced 8.2 percent in December and 5.5 percent in January as freezing temperatures damaged fruit. Output dropped to 133.6 million boxes of oranges, the second-smallest in two decades.
In October, the U.S. Department of Agriculture estimated domestic orange output will total 146 million boxes, 9.3 percent larger than last year. The harvest will be complete in July. A box weighs 90 pounds, or 41 kilograms.