Orange-juice futures resumed their bullish stance Thursday as traders weighed the impact that Hurricane Irma could have on orange groves in Florida.
Florida 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 3.9%, to end at $1.4635 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.
James Cordier, president of OptionSellers.com in Tampa, Fla., said he was out of the orange-juice market until after the storm.
"The markets are absolutely shut down for 48 hours during the pertinent time for this storm, and the difference between the storm track changing 50 or 75 miles is the difference between wreaking havoc on the citrus industry or it being painful to hotels," he said.
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 1.8%, to close at 14.03 cents a pound; cocoa for December lost 0.6%, to settle at $1,907 a ton; arabica coffee for December was up 1%, to end at $1.2915 a pound; and December cotton was off 0.3%, to end at 74.27 cents a pound.
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(END) Dow Jones Newswires
September 07, 2017 16:05 ET (20:05 GMT)