OJ prices surge on worries over Brazilian imports

AP News
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Posted: Jan 20, 2012 3:50 PM
OJ prices surge on worries over Brazilian imports

Orange juice futures surged Friday on concerns that federal regulators might restrict imports from Brazil.

Orange juice for March delivery rose 10 cents, the maximum amount allowed in daily trading, to close at $2.1065 per pound. The price is near a record high.

Traders are worried that juice imports from Brazil could be halted if the U.S. Food and Drug Administration finds traces of a banned fungicide. The FDA started testing for the fungicide this month after low levels were detected in juice supplies. The fungicide is not approved for U.S. consumption, but is used in Brazil.

The FDA said Friday that several recent tests didn't find traces of the fungicide, but inspections are ongoing.

While the FDA did not find any positive traces of the fungicide, carbendazim, traders are nervous because the testing is ongoing, said Justin Honrath, an analyst with CPM Group in New York.

What makes investors edgy is the lack of transparency for FDA's testing regimen, Honrath said. Investors worry that a surprise announcement of an import ban could be around the corner. "Of course, everyone is going to look at the worst-case scenario," he said.

In other trading, precious metals prices ended higher. Silver for March delivery rose $1.166 to $31.675 an ounce. Silver has gained more than 8 percent this week. Gold for February delivery gained $9.50 to end at $1,664 an ounce.

Industrial metals were mixed. Copper fell slightly after rising for most of the week.

March palladium fell $2.70 to $675.70 per ounce. April platinum closed up $14.30 at $1,532.30 an ounce.

Copper for March delivery fell 5.55 cents to end at $3.745 per pound. That leaves copper up 3 percent for the week.

In energy trading, benchmark crude oil fell $2.21 to $98.33 per barrel on the New York Mercantile Exchange.

Heating oil fell 4.76 cents to $2.9884 per gallon, gasoline futures dropped 3.14 cents to $2.7844 per gallon and natural gas gained 2.9 cents to $2.392 per 1,000 cubic feet.

March agriculture contracts were mixed.

Wheat rose 4.75 cents to end at $6.105 per bushel, corn gained 5.5 cents to $6.115 per bushel and soybeans closed down 10 cents at $11.87 per bushel.