Orange-juice futures sank to the lowest since October 2009 as signs Europe’s debt crisis is worsening and the U.S. economy may be slowing reduced prospects for commodity demand. Cotton fell.
In the week ended May 8, hedge funds and speculators reduced their net-long position, or bets on an orange-juice rally, by 64 percent to 1,018 contracts, the lowest since at least 2009, according to government data. European and U.S. equities fell on speculation that Spanish banks may have their credit rating lowered by Moody’s Investors Service and as a gauge of manufacturing in Philadelphia trailed analysts’ expectations.
“This is more of a mass liquidation,” Michael K. Smith, the president of T&K Futures and Options in Port Saint Lucie, Florida, said in a telephone interview. “People are afraid and are dumping assets.”
Orange juice for July delivery plunged 6.2 percent to settle at $1.0585 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest loss since May 1. Earlier, the price touched $1.039, the lowest for a most-active contract since Oct. 9, 2009.
The commodity has plummeted 54 percent since reaching a record $2.2695 on Jan. 23, reducing costs for PepsiCo., which sells Tropicana juices, and Coca Cola Co., which makes Minute Maid.
Commodity investment outflows were $1 billion in April, Barclays Plc said in a report e-mailed today. The Standard & Poor’s Spot Index of 24 raw materials slid as much as 0.8 percent, heading for the eleventh drop in 12 sessions.
Cotton futures for July delivery decreased 0.4 percent to 76.65 cents a pound in New York, the eleventh drop in the past 12 trading days.