August 29th, 2012

Orange-juice futures have plunged almost 10% since last Friday as Florida’s citrus groves largely escaped damage from Hurricane Isaac.

The storm has veered away from Florida, the nation’s top orange-producing state, and moved deeper into the Gulf of Mexico Tuesday.

Orange-juice futures concentrate for September delivery settled 3.9 cents, or 3% lower, at $1.2540 a pound on the ICE Futures U.S. exchange Tuesday.

The storm “wasn’t enough to flood anybody out,” said Andrew Meadows, a spokesman for Florida Citrus Mutual, a growers group. “I wouldn’t say it was a nonevent,” he added, “but it’s close.”

More than three-quarters of U.S.-grown oranges come from Florida, and futures prices are highly sensitive to weather, especially during the June-to-November Atlantic hurricane season.

Meteorologists warned hurricane activity often peaks in August and September and Florida still may get hit by a storm.

“We’re not done by any stretch of the imagination,” said Dennis Feltgen, a meteorologist and spokesman for the National Hurricane Center in Miami.

Including Isaac, there have been 10 named storms this season, which is a sign of an active hurricane season, Mr. Feltgen said. “We’re definitely running ahead of schedule,” he said. “Nobody is off the hook.”

Analysts expect the “weather premium”—higher prices when weather poses a risk to oranges—to continue to prop up prices through autumn, but the trend should then reverse if no groves are damaged by hurricanes.

“If another storm develops, we’ll probably rally,” said James Cordier, president of Tampa’s Liberty Trading Group. “But eventually, the window is going to close and [traders] will be in a hurry to sell it off.”

Robust global supplies of orange juice are a major headwind for any rallies.

Stockpiles of orange juice in top citrus grower Brazil at the end of the season that concluded June 30 more than tripled over the past year, reflecting a robust 2011-12 citrus crop along with slack global demand.

“This year the industry is going to process more juice than it can sell, further aggravating the situation with stocks,” said Christian Lohbauer, president of trade association CitrusBR in a news release Tuesday.

Brazil accounts for around 80% of global exports of orange juice, making it by far the world’s biggest player.

—Paul Kiernan in Sao Paulo contributed to this article.

- LESLIE JOSEPHS And ALEXANDRA WEXLER at Dow Jones.