(Bloomberg) -- Orange juice futures rose as Hurricane Milton approaches Florida, prompting evacuations and putting orange growers on alert.
Futures in New York gained as much as 3% in New York as the hurricane rapidly intensified in strength over the last 24 hours. Citrus groves in key producing counties are in the storm’s potential path, again risking trees that are just recovering from the impact of Hurricane Ian in 2022.
Commodity Weather Group said potential wind damage from the storm could threaten two-thirds of northern Florida’s citrus production, while meteorologist Jim Roemer of Best Weather Inc. said a path cutting across the state south of Tampa could hurt up to 20% of groves.
Growers are bracing for hurricane-force winds Wednesday through Thursday, said Ray Royce, the executive director of the Highlands County Citrus Growers Association in central Florida. The storm could knock growing fruits off of trees, while rains could impact root systems and uproot trees that have already been stressed by a citrus disease, Royce said.
“We’ve got hundreds of trees per acre. It’s not like you have one tree in your backyard you can go tie down,” Royce said. “There’s nothing you can really do to protect the trees or protect the fruit. It’s too early to harvest the fruit in advance.”
Trevor Murphy, a grower in Highlands County, said he is preparing by filling fuel tanks and ensuring that infrastructure like drainage systems are working properly.
He is expecting damage to his trees, some of which are less than 60 days from harvest, but said the extent will depend upon wind speeds. The hurricane “is a waiting game until the track gets firmed up,” he added.
In other soft commodity markets, coffee prices sank on expectations that top grower Brazil could see much-needed rains over the next few weeks. The most-active arabica contract fell as much as 5.4% in New York, the most since April, and robusta futures dropped as much as 4% in London.
A new cold front is expected to bring moderate rains over coffee-producing areas this week, though temperatures could remain high until mid-week, Climatempo meteorologist Nadiara Pereira said in a Monday note.
Additional rain is also expected the following week in northern Brazil, including the country’s largest coffee-producing state of Minas Gerais, said Donald Keeney, meteorologist at Maxar Technologies Inc.
The rain should help improve soil moisture and induce flowering for the 2025 crop. That’s alleviating concerns over an extended drought in Brazil that sent futures soaring earlier this year and boosted prices for consumers.
Still, even with upcoming rains, it is “too early to predict the extent of recovery of coffee trees,” analysts at Hedgepoint Global Markets said in a weekly report.
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