Orange Juice Slides As Weak Demand Weighs On Market
January 17 2017 - 11:38AM
Dow Jones News
By Julie Wernau
Orange juice futures fell lower Tuesday on waning demand for
juice coupled with indications that production drops have
stabilized.
Frozen concentrated orange juice for March delivery lost 2.3% to
$1.79 a pound on the ICE Futures U.S. exchange, on track for its
lowest close since Aug. 18.
Florida is home to the most oranges used in U.S. juice but those
oranges have increasingly served the not-from-concentrate
market.
Imports have exceeded domestic juice in the concentrated market
since the 2013/2014 season, according to data from the Florida
Department of Citrus.
The state has been struggling to contain a disease called citrus
greening which causes oranges to drop before they are ripe.
Last week the U.S. Department of Agriculture downgraded this
year's production estimate for the state slightly to 71 million
boxes versus its estimate of 72 million boxes in December, 13%
below last year's production, which was the lowest since the
1963-94 season.
Judith Ganes Chase, president of commodities research firm J.
Ganes Consulting LLC of New York, said investors have been dumping
long positions they took on last year when production prospects
plummeted and Brazil was also struggling with a smaller orange crop
due to drought.
The fundamentals in the market are no longer as clearly bullish
for traders, she said, as the biggest challenge for the orange
juice market is shrinking consumption as prices rise and beverages
that are perceived as healthier crowd out the market.
"Brazil has shipped more product to Florida and this is closing
the gap in supplies at the same time that demand continue to
erode," Ms. Ganes said.
Last year Americans drank the least amount of orange juice ever
in data Nielsen collects going back to 2002.
In other markets, raw sugar for March was up 1.2% at 20.77 cents
a pound, cocoa for March rose 0.3% to $2,219 a ton, arabica coffee
for March was up 0.2% at %1.4955 a pound and March cotton slumped
0.2% to 72.13 cents a pound.
Write to Julie Wernau at julie.wernau@wsj.com
(END) Dow Jones Newswires
January 17, 2017 11:23 ET (16:23 GMT)
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