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Orange Juice Futures Retreat from Highs as Weather Improves

September 14, 2016 at 17:17 by Andrew Moran

Orange juice futures retreated from highs on Wednesday as Florida weather reports have improved. A tropical storm is now expected to move across northern Florida without posing any damage to the state’s citrus crops. Florida currently grows the most oranges for US juice.

November frozen concentrated orange juice futures declined 0.6% to $1.9605 per pound at 15:50 GMT on the ICE Futures US exchange. Orange juice futures pared gains it had made on Tuesday.

Despite negative reports pertaining to orange juice sales, investors have been high on orange juice futures. Last week, orange juice futures reached their highest level since March 2012, and the contract has traded near that high since Friday.

This is the time of the year that the orange juice market jumps because traders are bullish that weather could impact the state’s citrus groves. Adverse weather has become the popular bet among investors in 2016, especially with tight crop levels and falling orange juice inventories from incurable diseases. Florida orange growers are producing their smallest harvest in more than half a century.

Brazil, the world’s largest orange grower, has suffered the same fate this year.

Next month, the first US Department of Agriculture forecast of the 2016–17 season will be released.

Orange juice has been in the news as of late because reports show that consumers are no longer adding the beverage to their breakfast anymore. Nielsen released a report on Monday that found sales of refrigerated orange juice tumbled 4.1% in the last year and frozen orange juice sales dipped 9.7%.

Due to high volumes of sugar that is added to orange juice, consumers are turning to healthier alternatives, such as carbonated water.

Even with negative publicity, orange juice prices have been bullish all year long. Orange juice prices are up roughly 20%, year-to-date.

Meanwhile, October raw sugar futures slipped 1.5% to 20.13 cents per pound.

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