Orange juice futures shot 10.7 percent higher Tuesday after the government said it will increase testing for a fungicide that was found in low levels in orange juice.
Investors snapped up contracts because of the uncertainty about whether orange supplies will be affected by the testing program. Orange juice futures for March delivery rose 20 cents to finish at $2.0775 per pound, the highest settlement price since March 2, 2007.
The Food and Drug Administration's stricter testing program comes after an unidentified company contacted the agency in late December and said it had detected low levels of the fungicide carbendazim in its orange juice and in juice sold by competitors.
The agency said it is not concerned about the safety of the juice but will test shipments at the border to make sure that contamination isn't a problem. An FDA official said there were no plans to pull juice off retail shelves. But if the agency finds orange juice with the fungicide at levels that present a public health risk, it will take action to ensure that the product is removed from the market.
Carbendazim, which is used to control fungi or fungal spores in agriculture, is not approved for use on citrus in the United States, but is used in Brazil, which exports orange juice to the United States.
TransWorld Futures analyst Robert Rutger said the supply concerns were enough to send prices higher even though current inventories are relatively healthy. The U.S. Agriculture Department has predicted that 9.12 million tons of oranges will be on hand at the end of this year's growing season, an increase of 3 percent from the total at the end of the previous season.
In other trading, cocoa prices jumped 7.5 percent on concerns about weather affecting the Ivory Coast crop, Barclays Capital analysts wrote in a report. There also has been a recent decline in shipments arriving at ports. Cocoa for March delivery rose $163 to finish at $2,333 per metric ton.
Spencer Patton, founder of the hedge fund Steel Vine Investments LLC, said investors were bargain hunting after the price of cocoa fell significantly since September.
Other commodity prices were mostly higher on expectations that China's economy will continue to grow this year, which would strengthen demand for everything from copper to oil. In addition, credit ratings agency Fitch Ratings said it won't downgrade France this year. A downgrade would have impacted Europe's efforts to resolve its debt crisis.
Gold for February delivery rose $23.40 to end at $1,631.50 an ounce. In March contracts, silver increased $1.033 to finish at $29.815 per ounce; March copper rose 9.7 cents to $3.513 per pound and palladium settled up $17.35 at $635.20 an ounce. April platinum rose $35 to end at $1,464.60 an ounce.
Benchmark crude increased 93 cents to finish at $102.24 per barrel on the New York Mercantile Exchange. Heating oil rose 2.84 cents to $3.1014 per gallon, and gasoline futures rose 1.38 cents to $2.7728 per gallon. Natural gas fell 8 cents to $2.97 per 1,000 cubic feet.
March wheat fell 2 cents to finish at $6.3975 per bushel, March corn was unchanged at $6.52 per bushel and March soybeans fell 1 cent to $12.32 per bushel.
Associated Press writer Mary Clare Jalonick contributed to this report.