Orange juice futures resumed their bullish stance Thursday as traders weighed the impact that Hurricane Irma could have on orange groves in Florida.
The state is home to the most oranges used in U.S. juice but has become less relevant to the thinly traded frozen concentrated orange juice market as most oranges there are used in the not-from-concentrate market.
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Frozen concentrated orange juice for November rose 3.2% to $1.4525 a pound on the ICE Futures U.S. exchange, continuing a week of volatile trade related to forecasts of the path of Hurricane Irma, which is expected to reach Florida by early next week.
Kevin Sharpe, owner of Basic Commodities Inc. in Winter Park, Fla. said bullish traders in the orange juice market are looking at forecasts that show the hurricane heading up the Indian River area along the east coast of Florida. The area is not the largest growing region in the state but is still a significant source of fruit.
"The last 10 years, Florida is becoming less and less relevant as far as juice production goes. Brazil is the big man on the block," Mr. Sharpe 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.
Meanwhile, Brazil, the world's largest grower, has stepped up production. Brazilian fresh orange production is forecast at 471 million boxes, up from 352 million in 2016-17 and the highest total since 2012-13.
In other markets, raw sugar for October fell 1.6% to 14.06 cents a pound, cocoa for December lost 0.5% to $1,907 a ton, arabica coffee for December was up 1.4% at $1.2965 a pound and December cotton was off 0.6% at 74.02 cents a pound.
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(END) Dow Jones Newswires
September 07, 2017 12:10 ET (16:10 GMT)