NEW YORK: Orange juice futures settled lower in the face of high supplies on Monday, ending a brief three-day advance after the market fell to a 2-1/2 year low last week as bearish fundamentals kept the market on the defensive, analysts said.
Key July frozen concentrated orange juice fell 5.95 cents or 4.86 percent to end at $1.166 per lb, dealing from $1.15 to $1.238.
"There's just no weather scare (in Florida). I think juice is stabilizing," said The Price Group analyst Jack Scoville. Florida is the top citrus producing state in the country.
The market has fallen over 45 percent since soaring to a record in January due to fears of a supply crunch when it was discovered a prohibited fungicide was used in the citrus exports of top producer/exporter Brazil.
Those fears have receded, especially given that supplies are abundant while retail demand is weak, trade sources said.
The market will probably consolidate around its current level while players await the start of the annual storm season on June 1, dealers said.
From June 1, hurricanes forming in the Atlantic Ocean and Caribbean Sea could sweep in and batter Florida's citrus groves. The storm season ends on Nov. 30.
"Until we get a storm hitting Florida, we won't be advancing very far," a broker said.
Traders said supplies will remain abundant. Top orange producer Brazil's crop in 2012/13 is expected to be down 15 percent from the bumper harvest of 428 million (40.8 kg) boxes in 2011/12.
Volume on Monday hit nearly 1,400 lots, about 50 percent below the 30-day norm, preliminary Thomson Reuters data showed.
Open interest, an indicator of investor exposure, rose slightly to 22,093 lots as of May 11, ICE Futures US data showed.
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