Here is this week's edition of Futures File, our weekly commodities wrap-up.
OJ prices lowest of year
The cost of a balanced breakfast continues to get cheaper as orange juice prices plummet. U.S. demand for orange juice has fallen to the lowest level in over a decade as consumers snub OJ for other beverages, dropping prices near the lowest level for the year.
Despite the sour demand outlook, some analysts point to a relative shortage of oranges, especially in Florida, which is poised to have its smallest harvest in nearly 30 years.
Florida is home to 70 percent of U.S. orange production and has been struggling in recent years due to a plant disease known as citrus greening that causes the trees to prematurely drop fruit.
Meanwhile, weather watchers continue to monitor the Atlantic for hurricanes, which can damage groves if they make landfall. So far, no major storms have hit Florida during this year’s heretofore mild hurricane season.
As of midday Friday, frozen concentrated orange juice futures, traded in New York, were worth $1.38 per pound.
Wheat snaps higher
As 20,000 Russian troops amassed along the Ukrainian border this week, commodities markets quickly assessed the potential risks of an invasion. A primary concern was Ukraine’s wheat crop, one of the largest in the world.
Known as the breadbasket of Europe, Ukraine is a major exporter of the grain. The majority of Ukrainian wheat production is in regions that are heavily populated by Russian-speakers, making them likely targets of Russian military aggression. As a result, prices for wheat popped, breaking the pattern of recent price declines seen in all of the grain markets.