Submitted by Fox First at Ten on December 12th
By By SANDY SHOREAP Business Writer
Orange juice futures surged 3.2 percent Wednesday as dry weather hurts Florida's crop production.
Frozen orange juice concentrate for January delivery gained 4.2 cents to finish at $1.341 per pound, its second gain in a row. The market for orange juice is small, so prices can swing sharply.
The southern portion of Florida has been dry, which has hurt the size of the oranges, analysts said. Traders also are concerned about the potential of a winter frost that could damage the crops.
The U.S. Agriculture Department has predicted that Florida's total orange production would be 146 million boxes after next year's harvest is complete. That's down 5 percent from the agency's October forecast and slightly lower than last season's production.
The USDA also forecast production of early, midseason and Navel varieties at 67 million boxes, which is down 9 percent from the previous forecast and down 10 percent from last season.
Yet demand for orange juice has been weak as consumers shift to specialty coffee and energy drinks, said Sterling Smith, a futures specialist with Citibank Institutional Client Group.
Other commodities were mostly higher after the Federal Reserve took additional steps to boost U.S. economic growth.
The Fed said it will continue its monthly purchases of $45 billion in long-term Treasurys and $40 billion a month in mortgage bonds. The central bank also plans to keep its key short-term interest rate near zero at least until the unemployment rate drops below 6.5 percent and expected inflation remains no more than 2.5 percent.
Gold and other commodities have benefited from previous Fed bond-buying programs because low interest rates pressured the dollar. Commodities are priced in dollars, so a weaker dollar makes them more of a bargain for traders who use other currencies.
Gold for February delivery rose $8.30 to finish at $1,717.90 per ounce and January platinum gained $6.40 to $1,646.40 per ounce.
In March contracts, silver rose 76.5 cents to end at $33.782 an ounce, copper rose 2.95 cents to $3.716 per ounce and palladium gained $4.35 to end at $701.15 per ounce.
Benchmark oil rose 98 cents to finish at $86.77 per barrel, heating oil rose 3.98 cents to $2.9668 per gallon and wholesale gasoline gained 3.6 cents to $2.6465 per gallon. Natural gas fell 3 cents to $3.382 per 1,000 cubic feet.
In agricultural contracts, March wheat fell 9.5 cents to end at $8.12 per bushel, March corn dropped 2.5 cents to $7.255 per bushel and January soybeans rose 1.5 cents to $14.735 per bushel.
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