Orange-juice futures sank Wednesday in the wake of two key forecasts for global orange production that estimated a boost in supplies.
Continue Reading Below
Frozen concentrated orange juice for July lost 3.2% to end at $1.4365 a pound on the ICE Futures U.S. exchange, a one-year low.
Fundecitrus, a citrus growers and juice manufacturers association from the state of Sao Paulo, released its estimate for the 2017/2018 orange crop in Brazil.
The group estimated that the region will grow 364.47 million boxes of oranges, versus its final estimate last year of 245.31 million boxes last season, a 49% increase year-over-year. Also, Wednesday afternoon, the U.S. Department of Agriculture raised its forecast for Florida, up 1% from last month's estimate but still down 17% over last year at 68 million boxes.
The estimates came as a welcome reprieve for orange-juice makers.
Rampant citrus greening disease, which causes fruit to drop before it is ripe, has devastated groves in Florida, home to most oranges grown for U.S. juice. Last year, lower production in Florida combined with drought in Brazil, the world's largest grower, caused futures prices to rise to as high as $2.25 a pound.
Continue Reading Below
"Price is what's driving consumption at retail for orange juice," said Brandon Saltmarsh with HomeMaker Juice.
In other markets, cotton for July extended losses following a monthly government update on supply and demand for fiber. Cotton for July lost 1.2% to 76.49 cents a pound, a near one-month low.
The USDA projected a 12% increase in U.S. cotton production for the 2017/2018 crop currently being planted to 19.2 million bales, above analyst expectations for both production and ending stocks.
Analysts expected production at 17.8 million bales and ending stocks at 4.13 million bales. Rabobank called the report slightly bearish for cotton, with U.S. cotton production at it's highest level since the 2007/2008 season but noted that globally, the USDA removed 9.05 million bales from Chinese endings stocks year-on-year as it destocks it's massive stockpile of fiber.
Raw sugar for July was up 2.6% at the close at 15.84 cents a pound, cocoa for July lost 0.3% to settle at $1,954 a ton, and arabica coffee for July delivery rose 1.1% to settle at $1.3665 a pound.
Write to Julie Wernau at email@example.com
(END) Dow Jones Newswires
May 10, 2017 17:44 ET (21:44 GMT)