NY juice finishes higher on investor buying

NEW YORK: Orange juice futures settled higher Wednesday on follow-through investor short-covering with switch trade buoying the spot month ahead of delivery by the end of the month, analysts said.

The now benchmark November frozen concentrated orange juice futures increased 1.70 cents to end at $1.644 per lb, moving from $1.638 to $1.667.

The spot September contract added 5.50 cents to close at $1.787.

The level of investor interest remained weak with market open interest dropping to 26,142 lots as of Aug. 16, its lowest since April 8, ICE Futures US data reported.

Volume was about 2,600 lots at 1:47 p.m. EDT (1747 GMT), 2.4 percent above the 30-day norm, Thomson Reuters data showed.

"I think its follow through buying and hurricane season," said Penson Futures analyst Bill Raffety.

Some market players point out that the peak period for storm formation in the annual hurricane season will run through the middle of October so the risk remained high of one hitting Florida, the top citrus grower in the country.

Traders said there was also some short-covering in September as market shorts pay up or roll their positions forward before the contract goes into delivery next month.

The market has digested the estimate of influential private forecaster Elizabeth Steger, who was said to have pegged Florida's 2011/12 citrus crop at 142 million (90-lb) boxes, at the lower end of trade expectations it would come in from 140 to 150 million boxes.

Louis Dreyfus pegged the crop at 146 million boxes, sources said. In 2010/11, the Florida crop stood at 140 million boxes.

Volume traded Tuesday in the juice market hit 2,861 lots, ICE Futures US data showed.

Copyright Reuters, 2011