Jan. 23 (Bloomberg) -- Orange-juice futures surged to a record for a second session on mounting concern that citrus- greening disease in Texas and government tests for a banned fungicide in Brazil may reduce U.S. supplies.
Texas confirmed a case of citrus greening last week. The disease has damaged crops in Florida, the world’s second-biggest grower. The U.S. Food and Drug Administration has detained juice imports to check for carbendazim, a fungicide used on fruit in Brazil, the top producer. Futures in New York reached an all- time high of $2.2695 a pound.
“Fundamental news always wins,” Michael Smith, the president of T&K Futures & Options, Inc. in Port St. Lucie, Florida, said in a telephone interview. “I don’t see why it cannot hit $2.50 over the next six months.”
Orange-juice futures for March delivery climbed 4.4 percent to close at $2.1995 at 2 p.m. on ICE Futures U.S. in New York. The commodity surged 30 percent this month.
The price may ease to $1.95 in the next week or two before moving higher, Smith said.
Temperatures in Florida and California, the nation’s top and second-largest orange growers, will “remain above frost levels” this week, sparing citrus groves of potentially damaging weather, according to MDA Information Systems.
On Jan. 12, the U.S. Department of Agriculture cut by 2 percent its forecast for Florida’s crop this season after a dry spell curbed fruit size.
Inventories of frozen orange juice monitored by ICE have slumped 56 percent to 29.8 million pounds (13,533 metric tons) from a year earlier, exchange data show.
The retail cost of orange juice rose 12 percent in December from a year earlier, according to data from the U.S. Labor Department.
Prices at the grocery store could be 40 percent more expensive if futures stay high, said Terry Roggensack, a founder of the Hightower Report in Chicago.
Cotton futures for March delivery gained 0.8 percent to settle at 99.37 cents a pound on ICE. The fiber has risen 8.2 percent this month.
--With assistance from Marvin G. Perez in New York and Beejal Patel in Chicago. Editors: Thomas Galatola, Bob Brennan
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