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N.Y. Heating Oil Rises to Record on Drop in Crude Supplies

October 11^th, 2007

Heating oil futures in New York rose to a record after a U.S. Energy Department report showed that crude-oil supplies declined unexpectedly last week.

Oil inventories fell 1.67 million barrels, or 0.5 percent, to 320.1 million barrels. A Bloomberg News survey of analysts showed an expected increase of 1.08 million barrels. Reports of higher-than-forecast company earnings may signal rising demand for crude and refined products in the months ahead.

"With earnings good, that is just going to increase industrial production, which is going to use more crude oil," said Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon.

Heating oil for November delivery rose 3.01 cents, or 1.4 percent, to settle at $2.2473 a gallon at 3:02 p.m. on the New York Mercantile Exchange. The price reached $2.2711 during today's session, the highest for a contract closest to expiration since trading began in August 1978. The previous record, $2.2640 a gallon, was set on Sept. 20.

Wal-Mart Stores Inc., the world's largest retailer, raised its profit forecast, helping push the Standard & Poor's 500 Index and the Dow Jones Industrial Average to records earlier today before erasing gains.

Crude oil inventories were 8.3 percent above the five-year average after today's decline, the Energy Department said. Heating oil supplies rose 981,000 barrels, or 2.2 percent, to 44.8 million barrels last week. It was the biggest rise since Sept. 7 and left inventories at their highest since Feb. 23.

Crude Oil

Crude oil for November delivery rose $1.78, or 2.2 percent, to settle at $83.08 a barrel.

"Right now we have no product leadership," said Raymond Mazzeo, director of energy derivatives at Energy Merchant Intermarket Management LLC in New York. "This has been a crude-led rally." Crude oil prices could rise as high as $88.86 based on technical measurements, he said.

Stockpiles of distillate fuels, including heating oil and diesel, fell 563,000 barrels, or 0.4 percent, to 135.3 million barrels. Analysts estimated they would fall 775,000 barrels, according to the median of 16 responses to the survey.

Demand for distillate fuel rose 192,000 barrels a day, or 4.5 percent, to 4.47 million barrels a day, the highest since March 9.

Gasoline stockpiles unexpectedly rose 1.68 million barrels to 193 million barrels. Analysts said inventories would probably drop 375,000 barrels.

Gasoline for November delivery rose 3.3 cents, or 1.6 percent, to settle at $2.0666 a gallon in New York. The fuel is made to be blended with ethanol before delivery to filling stations.

The national average pump price for regular gasoline fell 0.5 cent to $2.76 a gallon, AAA said today on its Web site.

- by Jordan Burke in New York at jburke29@bloomberg.net

Orange Juice Futures Drop Most in 3 Weeks as Storm Threat Eases

September 27^th, 2007

Orange-juice futures fell the most in three weeks after forecasters said Tropical Storm Karen posed no threat to Florida, the second-biggest orange grower.

Karen, 920 miles (1,480 kilometers) east of the Windward Islands, is expected to weaken in the next 24 hours and poses no threat to land, the U.S. National Hurricane Center said today. Orange-juice futures had risen as much as 16 percent this month on concern the state's citrus groves would be damaged during the June-through-November hurricane season.

"You're seeing the weather premium come out of juice," said Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon. "We're at the end of the peak season and the odds of a hurricane after September diminish greatly."

Orange juice for November delivery fell 3.65 cents, or 2.8 percent, to $1.261 a pound on ICE Futures U.S., formerly known as the New York Board of Trade. The loss was the biggest for a most-active contract since Sept. 4.

The price has fallen 36 percent this year, the worst performance among 19 commodities in the Reuters/Jefferies CRB Index.

Orange juice has dropped partly on expectations Florida will grow more oranges this year than last year as groves recover from hurricanes in 2004 and 2005. Demand also has slumped as grocery store prices gained.

While storm threats this month and last have lifted juice prices for short periods, no hurricanes have hit Florida this year and futures are down 21 percent since the Atlantic hurricane season started in June.

Brazil is the world's biggest orange grower. Florida supplies most juice to U.S. consumers.

- by Ron Day in New York at rday1@bloomberg.net

U.S. May Let Florida Orange Forecast Stand as Harvest Nears End

June 8^th, 2007 - Bloomberg

The U.S. government may leave its estimate for Florida's orange crop, the world's biggest after Brazil, unchanged as the harvest nears an end.

The Department of Agriculture on June 11 will probably maintain last month's projection for Florida's crop at 130.6 million boxes, according to four analysts and traders surveyed by Bloomberg. That would be the smallest harvest in 17 years. A recent drought in Florida probably did not harm the crop, analysts said. A box of oranges weighs 90 pounds.

"I don't see severe damage" to fruit still on trees from the dry weather, said Bernard Isler, an analyst with Trendex Commodity Corp. in Plantation, Florida. The harvest concludes this month.

Orange-juice futures for July delivery fell 0.5 cent, or 0.3 percent, to $1.5235 a pound yesterday on the New York Board of Trade after two days of gains. The most-active contract has declined 23 percent this year.

The USDA is scheduled to release its estimate of the Florida orange crop at 8:30 a.m. June 11 in Washington.

Prospects for a smaller crop prompted Tropicana Products, owned by Purchase, New York-based PepsiCo, and Minute Maid, owned by Atlanta-based Coca-Cola Co., to increase retail orange- juice prices in 2006.

Florida's groves are still recovering from hurricanes that damaged trees and spread disease in 2004 and 2005. The state's growers produced 147.9 million boxes of oranges last season after the two years of storms. In the season ending June 2004, the state produced 242 million boxes.

The next crop, for the 2007-2008 season, may improve to 180 million boxes, said Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon.

"They said they had the best bloom in years and they got the timely rains," he said.

- by Ron Day in New York at +1-212-617-8990 or rday1@bloomberg.net.

Orange Juice Drops After Rains Soak Fields, Demand Weakens

June 7^th, 2007 - Bloomberg

Orange-juice futures fell after rain reached orange groves in Florida, the second-biggest grower after Brazil, and rising retail prices deterred consumers.

Rain fell during the weekend, said Meteorlogix LLC of Woburn, Massachusetts, aiding a crop that is forecast to be the smallest in 17 years. Retail prices have climbed 25 percent in the past year, stifling sales.

"The trees got a really good soaking and demand's been down," said Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon.

Orange-juice futures for July delivery fell 0.5 cent, or 0.3 percent, to $1.5235 a pound on the New York Board of Trade after two days of gains. The most-active contract has declined 23 percent this year.

The average U.S. retail price of orange juice was $5.93 a gallon in the four weeks ending May 12, according to AC Nielsen data posted June 4 on the Florida Department of Citrus Web site. Sales volume fell 14 percent from a year earlier, in part because of the higher prices, the report said.

Florida will produce 130.6 million boxes of oranges in the year ending this month, the U.S. Department of Agriculture said. Orange-juice futures have more than doubled in the past three years after hurricanes damaged Florida's crop in 2004 and 2005.

- by Ron Day in New York at +1-212-617-8990 or rday1@bloomberg.net.

Orange Juice Falls Most in a Month; Rain May Aid Brazil's Trees

May 23^rd, 2007 - Bloomberg

Orange-juice futures fell the most in a month as rain aids trees in the main citrus-growing area in Brazil, the world's largest producer.

Sao Paulo state will get rain the next five days, according to weather forecaster Climatempo. Brazil's orange crop will rise to 18.3 million tons, the government's statistics agency said May 10, raising its March estimate. Production had been expected to fall to 17.9 million tons from 18.1 million last year as farmers switch acreage to sugarcane to meet ethanol demand.

"They've had a lot of rain in Brazil that's helped the crop," said Stuart Kaufman, senior market strategist for Lind- Waldock in Chicago. "That's kept this market on the defensive. That rain will help them meet" the increased estimate, he said.

Orange-juice futures in New York fell 6.55 cents, or 4 percent, to $1.5685 a pound on the New York Board of Trade, the biggest drop for a most-active contract since April 19.

Prices have fallen for the past four sessions to the lowest close since April 27. Futures between $1.45 and $1.47 are buying opportunities, Kaufman said. They already have fallen 20 percent this year.

Rising retail prices have curbed consumer demand for juice, helping to push down futures, said Donna Heidkamp, a broker with RJO Futures in Chicago. U.S. sales dropped 15 percent to 49.6 million gallons in the four weeks ended April 14 from a year earlier, according to AC Nielsen data posted on the Florida Department of Citrus Web site. The retail price has jumped 24 percent to $5.91 a gallon in the period, the data showed.

Hurricane Season

Forecasts for a more active hurricane season from June through November aren't supporting prices, analysts said.

"Hurricanes can't keep it up until something happens," said Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon.

The season may yield 13 to 17 named storms, and as many as 10 might reach hurricane strength, the U.S. government's National Hurricane Center said yesterday.

"Just because there is a forecast for an above-average hurricane season doesn't mean there will be one that impacts Florida," Judith Ganes-Chase, a private analyst in Katonah, New York, said in an e-mail.

Hurricanes during 2004 and 2005 reduced Florida's orange production to an estimated 130.6 million boxes in the season ending around June, the smallest crop in 17 years, according to the U.S. Department of Agriculture. The state produced 242 million boxes the season before the hurricanes.

- by Shruti Daté Singh in Chicago at ssingh28@bloomberg.net

Cotton Rises for 5th Day as Rains, Drought Delay U.S. Planting

May 21^st, 2007 - Bloomberg

Cotton futures rose for a fifth-straight session as wet soil in Texas, the biggest U.S. grower, and drought in Georgia and Alabama delayed plantings.

U.S. planting is behind last year's rate, the U.S. Agriculture Department reported May 14. Western Texas needs warmer soil and drier conditions for large-scale planting to pick up, said Meteorlogix LLC, a weather forecaster in Woburn, Massachusetts.

"They are building in a weather premium because of delayed plantings," said Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon.

Cotton futures for July delivery rose 0.78 cent, or 1.6 percent, to 50.5 cents a pound on the New York Board of Trade. The price has climbed 7.7 percent in five sessions.

A futures contract is an obligation to buy or sell a commodity at a set price for delivery by a specific date.

Cotton still has dropped 10 percent this year amid forecasts for the largest surplus in 40 years. Six weeks of falling prices sparked purchases of U.S. cotton after it became cheaper than elsewhere in the world, analysts said last week.

Georgia, the fourth-biggest producing state, had planted 22 percent of its crop as of a week ago, compared with 54 percent a year earlier, the National Cotton Council reported on its Web site, citing USDA statistics. Texas had 27 percent of its crop planted, down from 36 percent last year.

The U.S. is the biggest exporter of cotton and the second- largest grower behind China. The U.S. will have 9.5 million bales of unsold cotton in the year ending July 31, the most since the 1966-1967 marketing year, according to the USDA.

- by Ron Day at rday1@bloomberg.net.

Cotton Has First Weekly Gain Since March as Plantings Delayed

May 18^th, 2007 - Bloomberg

Cotton futures rose for a fourth-straight day, capping their first weekly gain since March, as unfavorable weather delayed planting in the U.S. and lower prices attracted overseas buyers.

Georgia and Alabama are putting off planting because of dry soil, Massachusetts-based forecast Meteorologix LLC said today. In Texas, the biggest U.S. producing state, planting is behind schedule because of heavy rains. Buying increased after cotton futures fell 16 percent this year through May 14.

"Some percentage of the market is going to hedge against the possibility of a bad crop year, and that speculation is good for buoying prices at these contract lows," Jonah Ford, an analyst with Great Pacific Trading Co. in Grants Pass, Oregon, said in an e-mail.

Cotton for July delivery rose 0.17 cent, or 0.3 percent, to 49.76 cents a pound on the New York Board of Trade. It climbed 3.5 percent this week after falling for six straight weeks amid forecasts for the largest surplus in 40 years.

The U.S. is the biggest exporter of cotton and the second-largest grower behind China. The U.S. will have 9.5 million bales of unsold cotton in the year ending July 31, the most since the 1966-1967 marketing year, according to the U.S. Department of Agriculture.

With the yuan strengthening against the dollar, cotton from China is more expensive, spurring overseas buyers to snap up U.S. supplies that may be less than expected, said Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon.

Informa Economics said today cotton growers will take more acres out of production than the U.S. Department of Agriculture forecast, Shaffer said. The researcher said 11.9 million acres will be planted, less than the 12.1 million estimated by the U.S. last week and down from 15.3 million last year as farmers switch to corn and other crops with higher returns, he said.

"Cotton is rising on the potential for smaller acreage and increased exports," Shaffer said.

- by Ron Day at rday1@bloomberg.net

Coffee Declines in New York as Brazil Frost Risk Diminishes

May 15^th, 2007 - Bloomberg

Coffee in New York fell for the first time this week as the risk of frost diminished in Brazil, the world's largest producer.

Favorable coffee-growing weather is expected in Sao Paulo and Minas Gerais states, Massachusetts-based forecaster Meteorologix LLC said. Coffee rose 3.1 percent yesterday on forecasts for a likely frost that might damage crops. "They are realizing the weather's not going to be cold enough for a freeze," said Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon.

Coffee for July delivery fell 1.25 cents, or 1.1 percent, to $1.1185 a pound on the New York Board of Trade at 12:43 p.m. It gained 7 percent during the past four trading sessions.

- by Ron Day at +1-212-617-8990 or rday1@bloomberg.net

Orange Juice Surges From Hurricane Rumor

April 30^th, 2007 - Bloomberg

Orange-juice futures rose the most in two months on speculation that citrus groves in Florida will be damaged during hurricane season, reducing supply from an orange crop already slated to be the smallest in 17 years.

Forecasters are predicting an active Atlantic hurricane season this year, after fewer storms than expected in 2006. Florida, the world's second-largest orange producer after Brazil, was battered by hurricanes in 2004 and 2005, reducing citrus output and sending orange juice to a record high.

"Traders are looking ahead to an active hurricane season," Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon. "A lot of guys have been talking about it."

Orange-juice futures for July delivery rose 3.75 cents, or 2.4 percent, to $1.5885 a pound on the New York Board of Trade, the biggest gain for a most-active contract since Feb. 22. Futures have fallen 24 percent since reaching a record closing high on Dec. 8 of $2.0815, as high juice prices eroded demand.

Colorado State University's Philip Klotzbach and William Gray forecast five major and nine hurricanes out of a total of 17 named tropical storms during a season that lasts from June to November. Tropical Storm Risk, a U.K.-based group of scientists and insurers, predicts 17 storms and four major hurricanes.

Growers in Florida will produce 130.7 million boxes of oranges in the season that ends in June, down from 147.9 million boxes harvested last year and the smallest crop since 1990, the U.S. Department of Agriculture said on April 10.

Florida Orange Forecast May Be Cut on Lingering Storm Damage

April 9^th, 2007 - Bloomberg

Florida's orange crop, the world's biggest after Brazil, may be smaller than the U.S. government estimated last month because groves are still hurting from hurricanes in 2004 and 2005, analysts said.

Three of five analysts surveyed by Bloomberg said the U.S. Department of Agriculture tomorrow will probably reduce its estimate from last month's projection of 132 million boxes. Estimates ranged from 122 million boxes to 134 million, each weighing 90 pounds.

"We feel that the acreage and tree count was probably overstated" last month, said James Cordier, president of Liberty Trading in Tampa, Florida. "There was a huge correction last month and we see a tweak in the same direction."

Orange-juice futures for May delivery fell 5.75 cents, or 3.1 percent, to $1.83 a pound at 10:55 a.m. on the New York Board of Trade. A close at that level would be the biggest drop for a most-active contract since March 28. Futures are still up 27 percent in the past year on expectations for a smaller crop in Florida.

The USDA in October initially estimated the state would produce 135 million boxes. The agency then raised its forecast in December to 140 million boxes for the current harvest. It cut the estimate to 132 million boxes March 9.

"I feel the numbers were overestimated in the first place," Kevin Kerr, president of Kerr Trading International in Wilton, Connecticut, said in an e-mail. "I also feel that damaged fruit and poor quality fruit were also underestimated."

One analyst, Fain Shaffer, president of Infinity Trading Corp. in Medford, Oregon, said the USDA may raise its estimate slightly because the harvest of the late-season Valencia oranges is running ahead of the last two years.

Florida growers produced 147.9 million boxes of oranges last season after two years of storms damaged groves. In the season ending June 2004, the state produced 242 million boxes.

Smaller crops and rising futures had prompted price increases for juice by processors such as Atlanta-based Coca- Cola Co., which raised retail prices for its Simply Orange and Minute Maid juice four times in 2006. Tropicana, owned by Purchase, New York-based PepsiCo Inc., in November announced plans to raise prices for the second time in two months.

- by Shruti Daté Singh in Chicago at ssingh28@bloomberg.net