Chicago: Orange juice rose, halting a two-day slide, on speculation that seasonal storms during the next five months may damage citrus groves in Florida, the biggest orange producer after Brazil.
The Atlantic hurricane season this year probably will have 15 named storms through November, the UK Met office said on 18 June. No major storms are expected in the next 48 hours for the North Atlantic, Caribbean Sea or the Gulf of Mexico, the US’ National Hurricane Center said on Sunday on its website. The Atlantic hurricane season starts on 1 June.
“As we get deeper into the season, it should cause buying to come in,” said James Cordier, founder of OptionSellers.com in Tampa, Florida.
Orange juice futures for September delivery rose 2.25 cents, or 2%, to $1.131 a pound on ICE Futures US, formerly the New York Board of Trade. Most active futures have dropped 22% this year, including a 2.4% decline this week, partly on forecasts for a rebound in Florida’s output.
There’s a 70% chance the storm total will be between 10 and 20 from July through November, UK government meteorologists said. The statement said the long-term average from 1990 through 2005 was 12.4 storms in the same period.
Futures on Saturday touched $1.10 a pound, the lowest for a most-active contract since June 5.
Orange juice traders will pay close attention to the potential for tropical storms and hurricanes over the next 90 days, before shifting the focus to the Florida harvest that begins around October, Cordier said.
Hurricanes in 2004 and 2005 battered Florida’s citrus groves and spread disease, reducing production last season to 129 million boxes, according to the US department of agriculture (USDA). This season’s harvest, which is almost complete, will total 168.5 million boxes, the USDA says. A box of oranges weighs 41kg.
Cordier expects Florida’s production to range between 180 million and 185 million boxes in the harvest that will finish around June 2009.