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Orange Juice Plummets 3% on Higher Supply Forecast

Summary:
Orange juice futures are plunging on Wednesday as a revised forecast raises the supply outlook. Orange juice prices continue to slide in 2017 as demand slips and supplies increase, thanks to Brazil. July frozen concentrated orange juice futures tumbled %excerpt%.0485, or 3.27%, to .435 per pound at 16:33 GMT on Wednesday. Orange juice prices are trading at their lowest levels in more than a year. Year-to-date, orange juice futures are down nearly 25%. This comes as a new report projects that Brazilian orange production will spike in the 2017/2018 orange crop season. According to Fundecitrus, a citrus growers and juice manufacturers association from the state of Sao Paulo, Brazilian farmers will grow 364.47 million boxes of oranges. This represents a 49% year-over-year increase from last year’s

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Orange juice futures are plunging on Wednesday as a revised forecast raises the supply outlook. Orange juice prices continue to slide in 2017 as demand slips and supplies increase, thanks to Brazil.

July frozen concentrated orange juice futures tumbled $0.0485, or 3.27%, to $1.435 per pound at 16:33 GMT on Wednesday. Orange juice prices are trading at their lowest levels in more than a year. Year-to-date, orange juice futures are down nearly 25%.

This comes as a new report projects that Brazilian orange production will spike in the 2017/2018 orange crop season. According to Fundecitrus, a citrus growers and juice manufacturers association from the state of Sao Paulo, Brazilian farmers will grow 364.47 million boxes of oranges. This represents a 49% year-over-year increase from last year’s estimate of 245.31 million boxes. Brazil is the largest orange producer in the world.

Supplies are recovering as global orange production climbed by nearly three million tonnes to 49.6 million tonnes in the 2016–2017 season.

With orange output slightly rebounding in Florida, the second-largest orange producer, prices are being impacted. It is a complete reversal from last year, when citrus greening hurt Florida groves and a drought affected Brazilian farms. Orange juice prices surged as high as $2.25 per pound.

Industry experts note that lower prices are helping lift demand for the classic breakfast beverage.

Last week, Nielsen reported that total US sales of orange juice plummeted 7.6% to 33.36 million gallons in the four weeks ending April 15. Also, throughout the 2016–2017 season, orange juice sales dipped 7.4% and frozen orange juice sales fell 9.3%.

During the past month, speculative traders have bet that orange juice futures will spike because of weather-related events. This is about the time of year that investors make seasonal long bets ahead of the hurricane season, which could hurt orange supplies in The Sunshine State.

If you have any questions and comments on the commodities today, use the form below to reply.


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Andrew Moran
I am a full-time professional writer. Prior to my self-employment, I worked as a reporter for Digital Journal covering the politics beat and The Toronto Times reporting on the city’s entertainment scene. I currently write mostly about business, marketing and finance

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