NY juice finishes at a 4-1/2 month low, may fall further

NEW YORK: Orange juice futures finished Wednesday at a 4-1/2 month low on heavy investor liquidation as talk of weak retail sales and the lack of a storm threat to Florida prompted players to exit the market, analysts said.

"The retail market is weak, the economic outlook is not encouraging and investors feel there is no upside in juice at this time," a dealer said. "We could be looking at a test of $1.50 or lower."

The key September frozen concentrated orange juice futures lost 9.50 cents or 5.64 percent to settle at $1.5885 per lb, dealing from $1.586 to $1.69. It was the biggest six-day fall in the juice market in about 12 years, Thomson Reuters data showed.

Since the spot contract traded at a session peak of $2.048 on July 11, the market has lost 22.56 percent in value when it traded at its session low on Wednesday.

The Thomson Reuters data showed it was also the lowest finish for juice on the spot charts since late March 22.

Investors have fled and this could be seen in market open interest which dropped to its lowest level since May 12 at 29,961 lots as of Aug. 9, ICE Futures US data reported.

Volume was around 10,200 lots at 1:48 p.m. EDT (1748 GMT), the highest since 11,103 lots were traded on June 16 and over quadruple the 30-day norm, ICE Futures US and Thomson Reuters data showed.

There is no sign a tropical storm will hit Florida, the top citrus growing region of the country, at this time. Forecaster Telvent DTN said the state will see scattered showers through Saturday.

The trade is also waiting for the first private estimates of the upcoming 2011/12 Florida citrus crop which will be released next week.

Forecaster Elizabeth Steger is said to be releasing her report next week and she will be followed almost immediately by major trade house Louis Dreyfus.

Volume traded Monday in the juice market hit 7,296 lots, the highest since June 21, ICE Futures US data showed.

Copyright Reuters, 2011