July futures of orange juice closed down $6.15 or 4.4% to $133.85 per pound in New York today, pushed lower by concerns that demand is in decline. This is the seventh trading day in a row that orange juice prices have fallen, and the commodity has shed well over 10% of value this month.
A report released yesterday by the Florida Department of Citrus showed that retails sales of OJ fell to 151 million litres in the four weeks up to 8 June, representing a decline of 1.3%. The National Agriculture Statistics Service, an arm of the US Department of Agriculture (USDA), revealed in its 21 June cold storage report that stocks of frozen orange juice concentrate rose to 1.042 billion pounds in May from April, an increase of 2%.
Prices had climbed in late May as high as $155 per pound, hitting a 13-month high, after crops in Florida were threatened by drought and disease, with the USDA indicating earlier this month that Florida may produce some 8.6% less than last year, but the softness in demand has sparked profit taking.
We are yet to enter the hurricane season, which has the potential to seriously impact the orange juice crop.