Orange-Juice Futures Advance on Florida Dryness; Cotton Rallies

Orange-juice futures capped the longest rally in a month as dryness threatens to curb output in Florida, the world’s second-largest citrus grower. Cotton rose to a seven-week high, while coffee, sugar and cocoa slid.

In the next 10 days, Florida’s growing areas “won’t get a break” from dry conditions with less than 0.25 inch (0.6 centimeter) of rain expected, David Streit, an agricultural meteorologist at Commodity Weather Group in Bethesda, Maryland, said in a telephone interview. Yesterday, the U.S. Department of Agriculture cut its forecast for the state’s harvest by 3.2% to the lowest since 1990, as drought compounded damage from a crop disease called citrus greening.

“Any type of weather scare is going to be bullish for prices because the crops are getting smaller and smaller,” Michael Smith, the president of T&K Futures and Options in Port St Lucie, Florida, said in a telephone interview.

Orange juice for January delivery rose 0.9% to settle at $1.4405/lb at 1:37 p.m. on ICE Futures U.S. in New York, the fifth consecutive gain and the longest rally since Nov. 12. Brazil is the leading orange producer.

Cotton futures for March delivery jumped 2.2 percent to 82.49 cents a pound, after reaching 82.93 cents, the highest for a most-active contract since Oct. 22.

Stockpiles at ICE warehouses fell to the lowest in almost two months, exchange data compiled by Bloomberg show. Yesterday, the USDA trimmed its projection for U.S. output for the season ending July 31, while boosting its estimate for global ending stockpiles to a record.

“The drop in inventories and the USDA data are supporting the market,” Louis W. Rose, the president of Risk Analytics LLC, a consultant in Memphis, Tennessee, said in a telephone interview. Still, “this rally will probably make U.S. cotton less competitive” compared with product from other countries, limiting further upside, he said.

Arabica-coffee futures for March delivery declined 0.5 percent to $1.097 a pound in New York. Raw-sugar futures for March delivery dropped 0.7% to 16.51 cents a pound, and cocoa futures for delivery in the same month fell 0.6% to $2,755 a metric ton.

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