Orange-Juice Futures Surge Most in Eight Months on Crop DiseaseMarvin G. Perez
Orange-juice futures jumped the most in eight months after the U.S. government said that Florida’s crop, the world’s second-biggest, will shrink 6.4 percent to the smallest since 1990 after a crop disease damaged groves.
In the season that started Oct. 1, the state’s output may drop to 125 million boxes from 133.6 million a year earlier, the U.S. Department of Agriculture said today in a report. Freezing weather damaged the crop in 1990, the agency said. A box weighs 90 pounds, or 41 kilograms.
“The estimate is a very bullish number,” Fain Shaffer, the president of Indianapolis-based Infinity Trading Corp., said in an e-mail. “We thought the yields would fall, but not by 8 million boxes. We are recommending to buy orange juice for our clients.”
Orange juice for January delivery climbed 5.3 percent to settle at $1.315 a pound at 1:49 p.m. on ICE Futures U.S. in New York, the biggest gain for a most-active contract since March 8. Earlier, the price reached $1.3195, the highest since Oct. 1.
Trading was 80 percent above the 100-day average for this time, according to data compiled by Bloomberg. The commodity has advanced 12 percent this year.
Temperatures in Florida’s groves may drop as low a 41 degrees Fahrenheit (5 Celsius) on Nov. 14, or more than 10 degrees below normal lows for this time of year, Anthony Chipriano, a meteorologist at MDA Weather Services in Gaithersburg, Maryland, said today in a telephone interview.
The USDA estimate “is a really small number, and now we have greater weather risk,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in an e-mail.
Yields for frozen concentrated orange juice will average 1.6 gallons per box, up from 1.59 gallons a year earlier, the USDA said.
“We may see this number continue to drop through the end of the year,” Shaffer of Infinity Trading said.
In the previous harvest, drier-than-normal conditions exacerbated the effects of greening, a bacterial disease that starves a tree of nutrients, causing fruit to shrink and drop prematurely.
Brazil is the top citrus producer.