Orange juice futures slumped Friday as traders eyed the first forecast for Brazil's next orange crop.
Frozen concentrated orange juice for January delivery closed down 1.3% to end at $1.9175 a pound on the ICE Futures U.S. exchange, its third straight session of declines and its lowest close since Oct. 18.
An attache report from the U.S. Department of Agriculture in Brazil said the agency expects a 37% increase to the orange crop in the Sao Paulo region of Brazil for the 2016-17 season to 340 million boxes from 249 million boxes last year. Sao Paulo is the most crucial growing region for the orange juice market.
"It's a little early. But the indicators are strong for this to alleviate all of the industry's supply issues," said Brandon Saltmarsh with HomeMaker Juice.
The orange juice market has been awaiting a turn lower following a year in which production concerns struck both Brazil and Florida, which grows the most oranges used in U.S. juice, mostly in the not-from-concentrate market.
Traders said the production estimates from Brazil would place the orange crop closer to historical levels, a bearish signal for a market for which demand has been on a steady decline since 2001. But the report is still early as the harvest in Brazil doesn't begin until May.
Florida is struggling with an incurable disease called citrus greening that causes fruit to drop before it is ripe. The situation has left juice producers there scrambling for Florida oranges and more heavily reliant on imports from Brazil and Mexico.
The USDA said in December it expects 72 million boxes out of Florida this year, the lowest production sincethe 1963-64 season and a 12% drop from last year.
In other markets, raw sugar for March delivery edged down 0.1% to settle at 18.15 cents a pound; cocoa for March rose 3.4% to close at $2,264 a ton; March arabica coffee was down 2.1% to end at $1.3615 a pound; and March cotton lost 0.5% to end at 69.87 cents a pound.
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(END) Dow Jones Newswires
December 23, 2016 16:19 ET (21:19 GMT)
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