Thermometers Drop, Heating Fuels Pop

The eastern half of the US plunged into a deep freeze this week, forcing homeowners to crank up the heat. As furnaces ran full speed, so too did demand for heating oil and natural gas, the two most used heating fuels in the US.

Natural gas prices have rallied more than 40 cents per million BTUs in the last two weeks, a 16% jump to $2.98 on Friday. Even more dramatically, heating oil has exploded over 50 cents per gallon (+33%) higher, touching $2.13 per gallon on Friday.

Ongoing refinery strikes and bargain hunting by petroleum investors are also giving heating oil prices extra upward momentum. Heating oil is chemically similar to diesel fuel, so the recent price jump is hurting truckers, farmers and other end users of diesel fuel who were just beginning to enjoy cheap fuel prices.

Orange Juice Skates on Thin Ice

On Thursday, bone-chilling temperatures crept into the Sunshine State as well, threatening Florida's orange groves. For some growers in Central Florida, temperatures fell into the 20s, which can destroy fragile citrus trees.

Luckily, much of the state escaped with temperatures that held just above freezing, leaving most of the orange crop unscathed. Going into this week, some traders had been buying orange juice on the expectation of a damaging freeze, but the narrowly warmer temperatures left them disappointed as prices poured lower.

Instead of rising, frozen concentrated orange juice futures made a three-month low at $1.32 per pound this week.

Witch's Broom Stirs up Chocolate

Cocoa trees are under attack by witch's broom and frosty pod, threats that sounds like they belong in fairy tales, not headlines. Unfortunately, these two fungi are real and are threatening to cut into an already-tight global cocoa supply.

Reduced production by diseased trees and booming demand for cocoa from Asia are shooting prices higher, which neared a four-month peak this week at $3028 per metric ton.