Frozen orange juice futures fell to a three-year low this week under $1.05 per pound. Prices are dropping as the peak of hurricane season has passed, leaving Florida unscathed. Florida produces over 80% of US orange juice and can have production severely reduced by tropical storms. Traders who bet on hurricane damage pushing prices higher have been disappointed, forcing them to sell off positions at a loss, squeezing OJ prices lower.
Orange juice demand has been falling since the late 1990's as consumers' preferences have shifted away from sugary drinks, and interest in alternative juices has been rising. This has put long-term pressure on prices, but US production has been falling sharply due to diseases in orange groves, a factor that can juice prices higher from time to time.
Juice lovers shouldn't feel crushed yet - OJ may still hold onto a place at the breakfast table. A new study from the UK showed that orange juice made drinkers more alert up to six hours after drinking.
Tough Job for the Fed
Friday morning, the US Bureau of Labor Statistics released its monthly employment figures, which sorely disappointed the market. The US economy added only 142,000 jobs in September, well below expectations for over 200,000 new jobs. Meanwhile, the government adjusted numbers for July and August downward by 59,000 jobs as well, an indication that the economy is not as strong as previously thought.
This dreary outlook will likely weigh on the Federal Reserve as it prepares to raise interest rates, and many Fed watchers expect rates to remain lower longer. After the jobs figures came out Friday, global stock markets fell. Meanwhile, gold prices gained nearly $30 per ounce after the poor jobs data broke on investor hopes that low interest rates could boost demand for the yellow metal.
Cattle Market Slaughtered
Herd mentality has continued controlling the cattle market, as traders, producers and end users dump cattle, pushing prices to a new two-year low.
On Friday morning, October live cattle neared $1.20 per pound as the market continued absorbing signs of weaker beef demand and a large influx of heavy animals at the slaughterhouses.