Orange-Juice Futures Slump as Frost Concern Eases; Cotton Gains

Jan. 13 (Bloomberg) -- Orange-juice futures fell, heading for the biggest decline in two weeks, on speculation that the Florida citrus crop will avoid damage from freezing weather. Cotton rose for a fourth day.

Orange groves face no weather risk for the next few days as temperatures in Florida, the second-biggest grower, remain above 1 degree Celsius (34 degrees Fahrenheit), Jim Dale, a senior meteorologist at British Weather Services, said in an e-mailed comment. Before today, orange-juice futures surged 19 percent since the end of November.

“The weather poses no threat to the crop for the next few days,” said Fain Shaffer, the president of Infinity Trading Corp., a commodities brokerage in Medford, Oregon. “We are also witnessing some profit-taking.”

Orange juice for March delivery declined 4.8 cents, or 2.7 percent, to $1.73 a pound at 9:56 a.m. on ICE Futures U.S. in New York. A close at this level would mark the biggest drop since Dec. 28. Prices may fall to $1.68 in the next few days, Shaffer said.

Orange juice jumped 27 percent last year, a second straight annual gain, and touched $1.808 on Jan. 4, the highest since April 2007, on concern that the December freeze in Florida harmed the crop. Brazil is the world’s biggest producer.

The U.S. Department of Agriculture yesterday lowered its forecast for Florida output by 2.1 percent from a month earlier to 140 million boxes. A box of oranges weighs 90 pounds, or 41 kilograms.

Cotton Rallies

Cotton futures for March delivery gained 1.34 cents, or 0.9 percent, to $1.4931 a pound in New York. The most-active contract touched a record $1.5912 on Dec. 21 on concern that global supplies may lag behind demand.

The USDA yesterday lowered its global-production estimate for the year that began on Aug. 1. Output will be 115.46 million bales, or 0.1 percent less than expected a month earlier, the agency said. The USDA raised its consumption forecast by 0.3 percent to 116.58 million bales. A bale weighs 480 pounds, or 218 kilograms.

(Source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aCXEO0hq11m0)