By Julie Wernau
Orange juice futures fell sharply Tuesday on waning demand for juice coupled with indications that production drops have stabilized.
Frozen concentrated orange juice for March delivery lost 5.2% to end at $1.736 a pound on the ICE Futures U.S. exchange, its lowest close since Aug. 3.
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 2013-14 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 1963-64 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% to end at 20.73 cents a pound, cocoa for March rose 1% to end at $2,235 a ton, arabica coffee for March closed up 0.4% at %1.499 a pound, and March cotton slipped 0.2% to settle at 72.11 cents a pound.
Write to Julie Wernau at firstname.lastname@example.org
(END) Dow Jones Newswires
January 17, 2017 18:20 ET (23:20 GMT)
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