Orange-juice futures tumbled to a 19-month low on speculation that citrus crops in Florida face no weather threat until the start of the hurricane season in June, leaving ample supply as U.S. demand slows. Cotton rose.
Groves in Florida, the world’s biggest orange grower after Brazil, escaped damage from cold weather during the winter months. U.S. retailers sold 252.23 million gallons (954.8 liters) of orange juice since Oct. 1, down 11 percent from a year earlier, the Florida Department of Citrus said on April 2, citing Nielsen Co. data.
“There’s a lack of any weather threat,” Sterling Smith, a market analyst for Country Hedging, a broker in St. Paul Minnesota, said in a telephone interview. “Demand has been suffering since the early 2000s.”
Orange juice for May delivery plunged 5 percent to $1.3965 a pound at 11:04 a.m. on ICE Futures U.S. in New York, after touching $1.391, the lowest for a most-active contract since Sept. 9, 2010. Prices have plunged 38 percent from a record $2.2695 on Jan. 23, as concerns eased that a U.S. probe would lead to a ban on imports containing a banned fungicide.
Hedge funds and other speculators reduced their net-long positions, or bets that prices will rise, to 5,879 futures and options contracts on April 3 from 8,764 on March 20, Commodity Futures Trading Commission data show. Inventories held by the three biggest producers in Brazil will more than double to 535,000 metric tons on June 30, a Brazilian industry group has said.
Cotton futures for July delivery rose 1.5 percent to 89.6 cents a pound on ICE.
Exports from the U.S., the largest shipper, may climb to 11.4 million bales in the year ending July 31, up from 11 million forecast a month earlier, the U.S. Department of Agriculture said yesterday. American farmers will sow 11 percent fewer acres this year, as they seek higher profits from other crops, the USDA said on March 30.
The boost to U.S. exports “caught many people by surprise, and the loss of acreage to other crops, such as soybeans, is also helping,” Smith said.
A bale weighs 480 pounds, or 218 kilograms.
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