OJ Futures Prices Sour as Softs Turn Lower

December 7, 2016 11:31AM CST

Orange juice futures prices are turning sour Wednesday, following the rest of the softs sector of commodities futures which have suffered from a stronger dollar and mixed expectations on production in orange-juice producing nations.

The January contract in orange juice futures was down 1.71 percent at 213.30 a pound in mid-day trading in the commodities futures markets.

In early November, orange juice futures soared to a 9-month high as declines in orange production in the U.S. and Brazil, the largest producer of orange juice, and growing concerns from of citrus greening, a severe plant disease, hit the production areas.

In the rest of the softs sector of commodities futures markets, the March contract in cocoa futures was lower on reports that the Ivory Coast, the largest producer of cocoa, expects a larger crop this year. Commodities futures markets analysts are expecting up to 1.9 million tons to be sold and Citibank saying production will outstrip demand this year

Sugar futures prices for March were down .56 percent at 19.40 a pound on Wednesday, while March coffee futures fell .35 percent to 141.50.

The March contract in cotton futures was .79 percent lower at 70.77 a pound after a Brazilian consultant firm cut projected Brazilian cotton plantings by 8 percent to 928,000 due to restrictive credit and other issues. It is about 4 percent smaller than last year.

This week’s economic calendar has been light on data of note to commodities futures markets. This afternoon the October Consumer Credit report is released and expected to show a reading of $18.4 billion. Earlier, Weekly Crude Oil Inventories showed a decrease of 2.389 million barrels. Meanwhile, October Job Openings and Labor Turnover (JOLTS) slipped 1.8 percent to 5.5 million, mostly in professional services and business sectors, according to the U.S. Department of Labor. Hiring fell to just under 5.1 million, while the number of people quitting dropped to about 3 million.

Thursday brings Weekly Natural Gas Inventories and Weekly Unemployment Claims, while Friday’s economic calendar contains the December Michigan Consumer Sentiment report and October Wholesale Inventories.

Next week’s December Federal Open Market Committee meeting is looming over commodities futures markets. Meanwhile, the possibility that the FOMC will increase the fed funds rate at the December 13-14 meeting is nearly 100 percent. The probability of a December rate hike in early November was  just 68 percent.

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