Tags: orange-juice | futures | ice | isaac

Orange Juice Falls 3.5% as Storm Premium Unwinds

Monday, 27 August 2012 03:55 PM

New York orange juice futures fell 3.5 percent on Monday as supply fears faded after Tropical Storm Isaac moved away from southern Florida, the biggest U.S. citrus growing region.

The orange juice market was unwinding the storm premium built last week when the November contract rallied 9 percent on worries that destructive wind and flooding could wipe out Florida's orange crop.

Isaac was moving away from south Florida and on course to slam into the Gulf Coast anywhere between north Florida and Louisiana by Tuesday night or early Wednesday.

The benchmark November contract fell as much as 7 percent Monday before paring some losses.

"It's a reflection that the hurricane is not going to impact production much, forcing some liquidation," said Steve Platt, analyst at Archer Financial in Chicago.

Across-the-board selling sent benchmark November frozen concentrated orange juice on ICE Futures U.S. down 3.5 percent to settle at $1.138 per lb.

Prices remained well below the record $2.20 per lb set in January when U.S. authorities restricted imports of Brazilian juice due to the use of a banned fungicide.

The slow pace of global economic recovery and a preference for fresh juice among more health-conscious consumers also weighed down on the frozen concentrated orange juice futures, traders said.

"Demand is weak in a soft economy, and the changing taste of consumers has also pressured the orange juice market," Platt said.

Experts noted that frost and blight have done more damage historically to the Sunshine state's orange groves than hurricanes. The last storm to hit the state's southern farms was Hurricane Wilma in 2005, when some 40 million-50 million boxes of oranges were lost as the storm knocked fruit to the ground and damaged trees.

© 2020 Thomson/Reuters. All rights reserved.

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Monday, 27 August 2012 03:55 PM
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