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Orange Juice Futures

Orange Juice Ends Lower for Fifth Straight Session

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December 8th, 2016

Orange juice futures ended with a fifth straight session of losses Thursday as traders eyed improved weather in Brazil, the largest growing region.

Frozen concentrated orange juice for January delivery slipped 0.2% to end at $2.137 a pound on the ICE Futures U.S. exchange.

November started out dry in all citrus areas, but it has been wetter in northeastern areas in recent days, according to WeatherBELL Analytics LLC in New York.

On Friday, the U.S. Department of Agriculture will update its estimate of this year's orange crop in Florida. In November, the department said it expected a crop of 72 million boxes, the lowest since the 1963-64 season and a 12% drop from last year as citrus greening disease causes fruit to drop prematurely.

Florida is home to the most oranges used in U.S. juice, but the vast majority of that crop is used in not-for- concentrate juice. Changing consumer tastes and greening disease have forced the U.S. to increase imports of concentrated orange juice from Brazil and Mexico. Imports have exceeded domestic juice in the concentrated market since the 2013-14 season, according to data from the Florida Department of Citrus.

Traders are closely watching developments in Brazil, where a bumper crop could change the bullish stance of the orange juice market.

Orange juice futures are up 44% year to date on the back of a year in which drought in Brazil and greening in Florida hurt crops. Florida is now partway through its next harvest, and Brazil's crops are still developing.

Consumer demand for juice has been on the decline. Americans drank 5.3% less juice year-over-year in 2016, according to Nielsen data, setting a new low of 464 million gallons in data going back to 2002.

In other markets, raw sugar for March lost 0.7% to end at 19.49 cents a pound, cocoa for March was down 2.8% to end at $2,259 a ton, arabica coffee slipped 0.1% to settle at $1.415 a pound, and cotton for March delivery was up 0.6% to settle at $71.44 cents a pound.

 - Julie Wernau at Wall St. Journal.

See Also: Coffee, Cocoa, Cotton, Orange Juice, Sugar
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