- Futures jump by limit as Tropical Storm Hermine strengthens
- Citrus crop already shrinking because of greening disease
Orange-juice futures rose to a five-week high as Tropical Storm Hermine headed toward Florida, threatening to damage the center of the U.S. citrus industry.
Hermine is strengthening and loomed as the first hurricane to strike the state since 2005. It will dump as much as 10 inches (25 centimeters) of rain on northwest areas, the National Hurricane Center said Thursday. Floods probably will occur in some far northern parts of the state’s citrus belt, Donald Keeney, a meteorologist at MDA Weather Services in Gaithersburg, Maryland, said in a telephone interview.
Hermine’s top winds may reach 75 miles per hour, making it Category 1 hurricane as it comes ashore in the Florida panhandle early Friday, the government said.
Orange juice for November delivery jumped 4.8 percent to close at $1.9285 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest gain for a most-active contract since June 6. Earlier, the price surged by the limit of 10 cents to $1.941, the highest since July 27.
“It’s all weather-related,” Boyd Cruel, the Chicago-based senior market analyst at High Ridge Futures, said in a telephone interview, referring to the price move. “We don’t know how much damage there’s going to be, and the market is pricing that fear.”
The price has soared 49 percent in the past 12 months as citrus-greening disease shrinks crops in Brazil and Florida, where the government predicts farmers this year will collect the smallest harvest in 52 years. Demand for the beverage also continues to slide.
Brazil is the world’s largest orange-juice producer, followed by Florida.
Cotton futures for December delivery rose 4 percent to close at 68.18 cents a pound, the biggest gain since July 12. The price climbed on speculation that flooding will hit southeastern parts of the U.S. including Georgia, the nation’s largest grower of the fiber behind Texas.