Orange-juice rose to the highest closing price since May 2007 on speculation that the U.S. Department of Agriculture will cut its estimate for Florida’s orange crop, the world’s second-biggest. Cotton also gained.
The USDA on Dec. 10 forecast that Florida will produce 143 million boxes of oranges in the harvest that began in October and runs to July. The projection, down from an October estimate of 146 million, was made from data collected before a potentially damaging spate of cold weather. The agency will update its forecast on Jan. 12
“We may see the number of boxes slashed because of the cold spell that this region is not used to in December,” said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida.
Orange juice for March delivery gained 3.5 cents, or 2.1 percent, to settle at $1.7275 a pound at 2 p.m. on ICE Futures U.S. in New York.
Yesterday, the commodity reached $1.808, the highest intraday price since April 2007, on speculation that output in Florida will decline because of the cold.
Temperatures dipped to minus 2 degrees Celsius (28 Fahrenheit) in some Florida growing areas last week, possibly causing marginal harm to fruit, according to Jim Dale, a senior meteorologist at British Weather Services.
The USDA may cut a “couple million boxes” of oranges in its next projection, according to the Highlands County Citrus Growers Association. The group accounts for 13 percent of Florida’s production. A box or oranges weighs 90 pounds, or 41 kilograms.
Futures rose 27 percent last year, partly as adverse weather threatened crops in the U.S. and Brazil, the world’s largest grower.
Cotton futures for March delivery rose 1.42 cents, or 1 percent, to $1.452 a pound. Earlier, the most-active contract rose the 4-cent exchange limit to $1.4778, the highest since Dec. 28.
In Australia, heavy rains have destroyed crops including cotton, halted coal deliveries, and shut mines. The flooding has caused billion of dollars in damage, according to the Queensland government. Australia is the world’s fourth-largest exporter of cotton.
“Australia is one of the things that helped the market move up,” said Mike Stevens, an independent trader in Mandeville, Louisiana. “There was overall buying interest in the commodities pack.”
The Standard & Poor’s GSCI Total Return Index of 24 commodities added 1 percent at 3:26 p.m. New York time, after dropping as much as 1.3 percent.
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