“Orange juice jumped due to the frigid weather that permanently damaged some of the crops here,” Jim Garasz, a principal at Transworld Futures in Tampa, Florida, said today in a telephone interview. “And there's more cold weather coming in here late tomorrow. That spooks the market.”

Orange juice for March delivery jumped the 20-cent exchange limit, or 11 percent, to $2.0775 a pound at 11:34 a.m. on ICE Futures U.S. in New York, the highest since March 2007. A close at that price would mark the biggest gain since October 2006 and leave the commodity up 23 percent this month.

“The market is starting to factor in that maybe there was more to the damage than initially thought,” Michael Smith, the president of T&K Futures and Options in Port St. Lucie, Florida, said in a telephone interview.

Eoin Treacy's view Orange Juice was limit up today and yesterday in both the March and May contracts. Prices had rebounded relatively well following the deeper pullback posted in July and hit a new recovery high today. Frost damage has historically had a dramatic impact on orange juice prices and the market is capable of moving its limit on consecutive sessions as we have just seen.

It is still unclear just how much damage has been sustained to the Florida crop. However, a clear downward dynamic, in the form of a limit down move, would be required to question short-term scope for additional upside.


Email of the day (3) – on an interesting graphic: