Orange-juice prices dropped for a third straight session Wednesday as consumption of juice continues to decline and supplies swell.
Frozen concentrated orange juice for July delivery lost 3% to $1.495 a pound, the lowest close since May 27, 2016.
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Nielsen reported Monday that total sales of orange juice in the U.S. fell 7.6% in the four weeks ended April 15 versus the same period last year to 33.36 million gallons. So far in the 2016-2017 season, orange juice sales have dropped 7.4%, with a 9.3% fall for sales of frozen orange juice.
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.
This year, a recovery in Brazil's crop is expected to boost supplies beyond demand for juice, with U.S. juice makers supplementing the meager Florida crop with supplies from Brazil and Mexico.
The U.S. Department of Agriculture has pegged global orange juice production for 2016/2017 up sharply at 1.968 million metric tons as Brazil rebounds from the lowest production in nearly three decades.
Brazil's production is forecasted to rise 44% to 1.2 million tons, with stocks of juice expected to rise 15% this year as Brazilian inventory doubles. Meanwhile, U.S. production is forecasted to drop 28,000 tons to 355,000 tons, with imports rising 20,000 tons to 300,000 tons.
"If you have an adequate supply of oranges, the level of consumption comes back to the forefront. We're back to the old challenges we had before," said Joe Nikruto, senior market strategist at RJO Futures in Chicago.
In other markets, raw sugar for July was off 1.3% at 15.67 cents a pound, cocoa for July lost 1.5% to $1,778 a ton, July arabica coffee was down 0.6% at $1.3545 a pound and cotton for July delivery was down 0.3% at 79.17 cents a pound.
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(END) Dow Jones Newswires
May 03, 2017 15:39 ET (19:39 GMT)