Orange juice futures reversed course to fall back Wednesday with updated forecasts for the path of Hurricane Irma moving the storm east, avoiding major citrus areas.
Frozen concentrated orange juice for November delivery fell 2.9% to end at $1.408 a pound on the ICE Futures U.S. exchange, falling back from earlier gains.
Continue Reading Below
The storm is moving through the Caribbean, with the potential to strike the continental U.S. by the weekend. A state of emergency has been declared in Puerto Rico, the U.S. Virgin Islands and Florida.
Wednesday afternoon, WeatherBELL Analytics in New York said Hurricane Irma's path remains an open question.
"The current forecast takes it near or over the eastern coast of Florida. Heavy rainfall is nearly a guarantee, but strong winds will likely affect eastern areas more so than western citrus areas," the forecasting firm said.
Florida is home to the most oranges used in U.S. juice and has struggled over the past decade with crop damage from an incurable disease that causes fruit to drop before it is ripe.
The USDA is expected to put out its first estimate for the 2017-2018 crop next month. Last year's final estimate of 68.7 million boxes was the lowest output since 1964.
Most of the oranges in Florida are used in not-from-concentrate orange juice, not in frozen concentrate. Brazil, the world's largest producer of oranges for juice, has become a key supplier for U.S. juice makers as Florida's crop has struggled.
"There is potential for a front to move south and east from the Midwest this week to protect the Eastern seaboard," said Jack Scoville, vice president of Price Futures Group in Chicago.
Until now, he said, Florida weather had been very positive for fruit development, but demand for juice in the U.S. has been waning as consumers turn to alternative beverages such as smoothies and energy drinks and away from sugar.
In other markets, raw sugar for October rose 1.9% to end at 14.29 cents a pound; cocoa for December was down 1.5% to settle at $1,917 a ton; arabica coffee for December was flat at $1.279 a pound; and December cotton was down to settle at 74.50 cents a pound.
Write to Julie Wernau at email@example.com
(END) Dow Jones Newswires
September 06, 2017 14:54 ET (18:54 GMT)