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Orange Juice Futures Slide Despite Frosty Weather

January 17, 2018 at 17:55 by Andrew Moran

Orange juice futures are trading lower despite frosty temperatures impacting many parts of the US. Citrus prices fell as much as 1% midweek even though traders expect the frigid weather to affect Florida’s production capabilities and output.

March orange juice futures slipped $0.011, or 0.78%, to $1.393 per pound at 16:33 GMT on Wednesday on the US ICE Futures exchange. Orange juice prices have risen to their best levels in two weeks, though they crashed 20% in 2017. Year-to-date, orange juice futures have advanced about 2%.

Rains and frost have hit northern areas of Florida, which are key citrus areas, and snow is in the forecast for several regions of the Sunshine State. Observers say that no hard freeze is expected, which may be what is driving the commodity’s red ink on Wednesday.

Last year, Florida saw most of its citrus crop decimated by Hurricane Irma. This occurred as Florida has already been dealing with what seems to be an incurable disease known as citrus greening, something that causes oranges to drop before they are ripe enough to be picked.

The US Department of Agriculture (USDA)’s revised its estimate of Florida’s harvest in December, projecting that the state would produce only 46 million boxes of oranges, the worst figure since 1945, in 2018.

Florida lawmakers have been demanding the federal government move ahead with financial assistance and relief for orange growers. Florida Agriculture Commissioner Adam Putnam has reassured the state that aid is coming soon, but Representative Tom Rooney argues that it is not soon enough.

The White House proposed a third round of $44 billion in aid with only $1 billion in overall agriculture relief. But the latest $81 billion disaster relief bill House consists of $2.6 billion in hurricane-related agriculture assistance, including nearly $800 million for Florida farmers.

Putnam said in a statement:

Florida’s farmers, ranchers and growers suffered unprecedented damage from Hurricane Irma, and today’s announcement of proposed emergency funding for Florida agriculture is the first bit of good news we’ve heard in months.

Investors are now looking to Brazil to offset Florida’s decline in orange output for the next couple of years.

If you have any questions and comments on the commodities today, use the form below to reply.

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