A cloudy outlook for Florida's orange crop has the OJ market going sky high. Prices for frozen concentrated orange juice (FCOJ) futures touched $1.60 per pound this week, the highest price since summer 2014.
Due to an insect-borne disease known as citrus greening, Florida's crop will be the smallest over 50 years, shrinking 14% compared to last year, according to recent USDA estimates. The disease is leaving Florida orange producers in dire straits, and the state could need as many as 20 million new trees to return to previous production levels.
Until Florida is able to successfully combat the disease, which causes trees to prematurely drop fruit, consumers will either have to deal with higher prices, find a new Vitamin C source, or look to new suppliers, like Brazil, the world's top OJ producer.
For traders, FCOJ continues to be an exhilarating market to follow, with prices moving up by 55% during the last six weeks.
Copper Market Chills
Copper prices hammered out a six-year low this week amidst ongoing concerns about the Chinese economy.
China is the world's largest consumer of copper, but demand is waning as its once-hot industrial and building sectors slow down and supply gluts grow. Mining companies worldwide have begun cutting back production in recent months, but prices have continued crumbling, falling to $2.15 per pound on Friday.
Healthy Harvest Hurts Farmers
As US corn and soybean farmers haul in one of the largest corn and soybean crops in history, they're facing some of the lowest prices in years. If they didn't take measures earlier this year to lock in higher prices, farmers will have a hard time turning a profit this year with beans near $8.50 per bushel and corn under $3.60.
Prices are under pressure due to the large supply, but also diminishing demand from major buyers. The US livestock industry could be cutting back as falling prices for pork and beef are limiting future growth. Meanwhile, demand from the biofuel industry has flat-lined in recent years as corn-based ethanol and soybean-based biodiesel production slumped after federal subsidies were removed.
Without rising demand or a threat to global grain supplies, farmers could be stuck with lower grain prices in the coming years, making it even more important that they utilize risk-reduction measures with their local elevator or hedge broker.