Orange juice prices exploded toward week’s end as meteorologists predicted a major hit to Florida’s citrus growing region. The strong winds and saturated soil can cause long-term damage to orange trees and cut yields dramatically.
On Wednesday, Governor DeSantis declared a state of emergency for 26 counties in the projected path of Hurricane Dorian. One economist estimated the loss in crop damage could be $18 to $20 billion. Peanuts in Georgia are another crop which could be terribly impacted by heavy flooding.
Frozen O.J. for November delivery shot up from 98 cents per pound to $1.10 at Friday’s peak.
**Energy Prices Get Stormy
Crude oil and natural gas, much bigger components to our world economy, also got a temporary lift from Hurricane Dorian. Though the threat to production from gulf rigs was expected to be minimal, interruptions to refineries and transportation, especially shipping of oil, could cause shortages where the products are needed.
In addition, Wednesday’s report from the U.S. Department of Energy indicated a 10 million barrel decline in stockpiles even though our production is making records.
West Texas crude for October delivery spiked up to $56.89 per barrel on Wednesday but fell back down Friday on trade tensions and declining demand.
**Hopes for Cooling Trade Tensions
Hogs, soybeans, and stock indexes rose sharply midweek following comments from China’s Commerce Ministry that both countries remain in communication over possible new trade talks.
Stepping back from the trade war could especially help beans and hogs as they are major exports to China, and their prices have been depressed by severe reduction in Chinese demand.
Hog futures for October delivery rallied from a low of 60 cents per pound a week ago to over 64 cents at week’s end. November beans jumped from $8.52 to over $8.75 as tensions eased and some thoughts that cold temperatures could threaten the U.S. crop which was planted late this year.