Orange Juice Falls as Florida Avoids Storm Threat, Dollar Rises

By Shruti Date Singh

Oct. 1 (Bloomberg) -- Orange juice fell for the sixth time in seven sessions on diminishing concern that a hurricane will hit citrus groves in Florida, the second-biggest grower, and as a rally in the dollar curbed the appeal of commodities.

No tropical storm activity is expected in the next 48 hours, the National Hurricane Center said at 2 p.m. in Miami. This season's hurricanes did no damage to orange crops in Florida, and Tropical Storm Fay in August lacked sufficient winds to hurt fruit on the trees. The U.S. Dollar Index rose to the highest level since Sept. 12.

``We are seeing a lack of hurricane threat,'' said Boyd Cruel, an analyst with Alaron Trading Corp. in Chicago. ``There is commodity weakness on the stronger dollar.''

Orange-juice futures for November delivery fell 2.4 cents, or 2.7 percent, to 86.8 cents a pound on ICE Futures U.S. in New York. Most-active futures yesterday reached 85.2 cents, the lowest since March 2005.

The price dropped 20 percent in September, the biggest monthly slide since February 1999, as concern eased that hurricanes will limit supply from Florida, the biggest orange producer after Brazil.

The Atlantic hurricane season began June 1 and runs through November, and the orange harvest in Florida starts this month.

Florida Output

The state's orange output fell to a 17-year low of 129 million boxes in 2007 after storms in 2004 and 2005 damaged citrus trees. Florida produced 170 million boxes in the harvest that ended around June, U.S. Department of Agriculture data show. A box of oranges weighs 90 pounds (41 kilograms).

The USDA is scheduled to release its first estimate for the coming harvest on Oct. 10.

Private citrus analyst Elizabeth Steger raised her Florida orange-crop forecast to 155 million boxes from an August estimate of 150 million, citing 3 million more trees than she previously estimated and more fruit.

Florida's total number of orange trees fell 7 percent to 65.8 million this year from 70.8 million in 2006, the USDA said Sept. 19.

If the USDA projects a crop of 155 million boxes or less, the price ``could work higher,'' Cruel of Alaron said.

To contact the reporter on this story: Shruti Date Singh in Chicago at ssingh28@bloomberg.net.