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Orange-Juice Futures Tumble Most in Three Months

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Dec. 31 (Bloomberg) -- Orange-juice futures tumbled the most in 11 months as concerns eased that adverse weather will curb output in Florida, the world’s second-biggest citrus grower. Coffee and cocoa also slid. Sugar and cotton rose.

“There is no threat for frost in the Florida citrus areas in the foreseeable future,” Kyle Tapley, a meteorologist at MDA Information Systems Inc. in Gaithersburg, Maryland, said in an e-mail. Rainfall over the weekend probably aided crops, and showers will return to northern parts of the state late this week, he said.

The forecasts “are not calling for any temperatures which will cause any sort of damage to orange production,” Sterling Smith, a market specialist at Citigroup Inc. in Chicago, said in an e-mail. “The possibility of better moisture is also adding to pressure” on prices, he said.

Orange juice for March delivery retreated 7.2 percent to settle at $1.1735 a pound at 2:06 p.m. on ICE Futures U.S. in New York, the biggest drop for a most-active contract since Jan. 11. In 2012, the price tumbled 31 percent, snapping a three-year rally.

On Dec. 11, the U.S. government cuts its estimate for the Florida crop by 5.2 percent after a lack of rain caused some fruit to spoil. Brazil is the world’s top producer.

Arabica-coffee futures for March delivery dropped 2.1 percent to $1.438 a pound on ICE. This year, the price plunged 37 percent, the most since 2000 and the biggest decline among the 24 raw materials tracked by the Standard & Poor’s GSCI Spot Index. Earlier, the commodity reached $1.4125, the lowest since June 11, 2010.

Longest Slump

Cocoa futures for March delivery slid 0.6 percent to $2,236 a metric ton, falling for the 10th straight session, the longest slump since December 2011. Earlier, the price touched $2,207, the lowest since July 25. The chocolate ingredient gained 6 percent this year.

In the three weeks ended Dec. 25, money managers and speculators reduced their bullish wagers by 18 percent from a net-long position of 40,871 futures and options on Dec. 4, the highest since January 2010, government data showed.

Speculators were “way too long and needed to get out” before year-end, Shawn Hackett, the president of Hackett Financial Advisors Inc. in Boynton Beach, Florida, said in a telephone interview. The price may fall to $2,100 before the liquidation ends, he said.

Raw-sugar futures for delivery in March rose 0.5 percent to 19.51 cents a pound, paring its 2012 fall to 16 percent.

Cotton futures for March delivery climbed 0.6 percent to 75.14 cents a pound. The fiber dropped 18 percent this year.

To contact the reporter on this story: Marvin G. Perez in New York at mperez71@bloomberg.net

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

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