Orange juice futures fell sharply Monday as traders eyed robust supplies in Brazil at a time when consumption continues to decline.
Frozen concentrated orange juice for September fell 4% to $1.345 a pound on the ICE Futures U.S. exchange.
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"The Brazilian production is larger than anyone thought it would become," said James Cordier, president of OptionSellers.com in Tampa, Fla.
Elizabeth Steger, a closely watched independent forecaster, estimated that Florida would produce 75.5 million boxes of oranges in the year beginning Oct. 1. That would be a 10% increase from the U.S. Department of Agriculture's 2016-17 estimate of 68.7 million boxes, which 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. About 340 million of these boxes will be sent to local processors for crushing into orange juice, compared with 222 million last season, according to J. Ganes Consulting LLC.
Rain deficits in Minas Gerais and Sao Paulo are improving, according to WeatherBELL Analytics in New York. Sao Paulo saw heavy rainfall in June and rain is expected to continue over the next week.
On Monday, Nielsen reported that orange juice consumption has continued to fall, with sales of orange juice in gallons down 8.9% year-over-year for the four weeks ended Aug. 5 for season-to-date drop of 7.5%. Meanwhile, prices continue to rise as orange juice producers scramble for fewer oranges in Florida for making not-from-concentrate juice. Prices have climbed 1.5% this year to $7.75 a gallon.
In other markets, raw sugar for October rose 1% to 13.54 cents a pound, cocoa for December lost 0.1% to $1,876 a ton, arabica coffee for December fell 1% to $1.3045 a pound, and December cotton was flat at 67.27 cents a pound.
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(END) Dow Jones Newswires
August 21, 2017 11:41 ET (15:41 GMT)