Orange juice prices soared to their highest in 3-1/2 years on Monday after the National Weather Service warned a hard freeze would strike Florida on Tuesday.
January frozen concentrated orange juice futures jumped the daily 10-cent limit to trade at $1.706 per lb at 9:00 a.m. EST (1400 GMT), its highest level since May 14, 2007.
The National Weather Service said a freeze warning for Levy county in Florida was in effect until 8:00 a.m. EST, but that another cold shot will hit the Sunshine State's citrus groves on Tuesday.
The colder air is coming in today, said Jennifer McNatt, a forecaster with the National Weather Service in Ruskin, Florida. The brunt of the cold air will be here tonight.
Citrus trees get damaged if temperatures fall below 28 degrees Fahrenheit for four hours or more.
At the present time, 4 to 5 hours of sub-freezing temperatures below 27 degrees are expected with the hard freeze warning area, the NWS added.
A juice trader said the market jumped because the trade remembers the hard freeze which battered citrus groves last December 2009 and in January 2010, sharply reducing the 2009/10 citrus crop.
One dealer said the market is even more vulnerable after the Agriculture Department reduced the estimate for Florida's 2010/11 citrus harvest to 143 million (90-lb) boxes from the October forecast of 146 million boxes.
An arctic air mass will continue to move into the region, the NWS office in Tampa, Florida, said. Freezing temperatures will occur over Levy county ... and across most of the region tonight into Tuesday, with additional sub-freezing temperatures Tuesday night into Wednesday.
(Reporting by Rene Pastor, Additional reporting by Tom Brown in Miami; Editing by John Picinich)