Orange-juice futures rose the most in four months on mounting speculation that this year’s hurricane season poses a greater risk than normal to Florida citrus groves, the world’s second largest.
While Tropical Storm Alberto probably poses no threat to Florida’s orange groves, “indication of early tropical activity in the vicinity is getting the markets jittery,” Donald Keeney, a senior agricultural meteorologist at MDA Information Systems Inc., said today in an e-mail. The Atlantic hurricane season typically starts June 1. Orange-juice futures have tumbled 41 percent in the past year.
“We’re having a storm pretty early in the season,” Jimmy Tintle, a market analyst with GreenKey Alternative Asset Services in Longwood, Florida, said in a telephone interview. “Everybody is getting their long bets in.”
Orange juice for July delivery surged 4.5 percent to settle at $1.068 a pound at 2 p.m. on ICE Futures U.S. in New York, the first gain in a week and the biggest since Jan. 20. Prices plunged 17 percent last week.
Alberto is projected to move northeast away from Florida, Keeney said. Computer models of weather patterns show another tropical system moving across Cuba, just southeast of Florida, heading into the Bahamas later this week, and another will move just east of the state later next week, Keeney said in an e-mail from Gaithersburg, Maryland.
In the week ended May 15, hedge funds and speculators shifted to a net-short position, betting prices will fall, for the first time since at least December 2009, when government records began.
Brazil is the world’s top citrus producer.