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Orange Juice Futures Plunge Again as Selloff Continues

August 31, 2017 at 16:59 by Andrew Moran

Orange juice prices are posting more losses on Thursday as investors continue their selloff patterns. After making some modest gains in the middle of the month, the agricultural commodity has retreated.

September orange juice futures tumbled $0.0195, or 1.46%, to $1.315 per pound at 16:38 GMT on Thursday on the ICE Futures exchange. Orange juice prices hit $1.45 earlier this month, reaching a four-month high, before reversing the trend. Year-to-date, orange juice prices have cratered more than 30%.

Industry experts say that this is more of a supply issue. Brazil, the world’s largest producer of oranges, has ramped up production and fresh orange output is forecast to top 471 million boxes, up from 352 million in the 2016–2017 season.

Florida, meanwhile, continues to sputter along and the Sunshine State has been unable to amplify output levels. That said, forecasters say production could experience a 10% increase to 75.5 million boxes next month as conditions of orange trees improve. Orange output is still as its lowest level since 1964.

This is the time of the year that investors place long bets on hurricane activity in Florida. Although Hurricane Harvey has devastated Texas, the weather event has hardly affected Florida. There are reports that a weather event named Irma could be in the state’s path.

Another issue that the orange industry needs to contend with is the paucity of demand. Last week, Nielsen reported that orange juice consumption in the US continues to fall. On the year for the four weeks ending August 5, orange juice sales have plummeted 8.9% — season-to-date, sales are down 7.5%.

Other commodities are rallying towards the end of the trading week. December corn futures rose $0.0825, or 2.39%, to $3.537 per bushel. December wheat futures climbed $0.035, or 0.81%, to $4.33 a bushel. December coffee futures jumped $0.0105, or 0.82%, to $1.292 per pound. October sugar futures surged 0.49 cents, or 3.52%, to 14.40 cents a pound.

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