Orange juice prices have been languishing in recent weeks as the 2013 hurricane season remains mild.
Tropical storms and hurricanes can drastically affect orange groves in Florida, home to a quarter of all global orange production. As a result, the OJ market usually prices in some probability of damage; without that damage, prices can fall due to greater supply.
There have been an above-average number of tropical storms this season, but heavy-hitting hurricanes have yet to develop, and conditions point toward continued calmer conditions in the Atlantic in the coming week. Hurricane season typically runs from June to November, with the strongest storms usually developing in mid-September, so threat of a major storm still looms.
As of midday Friday, frozen concentrated orange juice for delivery in November was trading for $1.33 per pound, near a two-month low.
Other industries benefit from a mild hurricane season, including oil and natural gas production in the Gulf of Mexico and Gulf Coast refineries. Without storm-driven shutdowns, those wells and refineries can continue operating at normal capacity, keeping energy supplies flowing to consumers.
Crude Climbs during Syrian Standoff
Crude oil rose this week as President Barack Obama continued to urge military intervention in Syria. Tensions with Russia and U.S. Congressional resistance to a military strike could both derail the president’s plans and are being closely watched. Crude traded Friday for $110.30 per barrel up $2.65 (2.5 percent) during the week.
Cattle Cheaper, Pork Pricier
Cattle and hogs, the two most actively traded livestock markets, made moves in opposite directions this week. Hogs hurried up 3.15 cents per pound (3.6 percent) to a new contract high, while cattle slid 1.6 cents (1.3 percent) to a one-month low.
Cattle prices have been under pressure amid consumer pushback against generally high prices; when beef prices get too high, consumers often switch to lower-priced pork and poultry.
Meanwhile, hog supplies have been limited by hot Midwest weather which crimps weight gain in the animals, while strong pork exports to China and Mexico have helped support demand, pulling prices higher.
Pork prices are still relatively cheap compared to beef, leading some traders to believe that the current trends can continue. As of midday Friday October lean hogs were worth 90.75 cents, while October live cattle traded for $1.25 per pound.