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NEW YORK, March 20 (Reuters) - Orange juice futures fell to a two-month low on Tuesday as ideal growing weather in the key producing state of Florida and the fall through a key area of support sparked a round of liquidation in the market, dealers said.
The key May frozen concentrated orange juice fell the 10-cent daily trading limit, or by 5.4 percent, to trade at $1.7425 per lb, its lowest level since early January, Thomson Reuters data showed. It was trading at $1.7765 per lb, down 6.60 cents, at 11:04 a.m. EDT (1504 GMT).
“I think it’s partly good Florida weather,” James Cordier, senior analyst of brokerage Optionsellers.com in Florida, said when asked for the reason behind the sell-off.
He said it appears Florida’s 2012/13 citrus crop is going to be even larger than the 147 million (90-lb) boxes for 2011/12.
“The crop is in good shape,” Cordier explained.
Traders said the fall of the May contract below the 200-day moving average at $1.8177 and then major support at $1.80 sparked technical liquidation which then touched off automatic pre-set computer sell orders.
Juice futures had rallied to record highs in late January above $2 a lb after the U.S. said it found a prohibited fungicide in imports of Brazilian juice, which accounts for half of all imports and around 10 percent of U.S. juice supplies.
The U.S. Food and Drug Administration conducted tests and excluded some shipments, but fears of a supply crunch have since eased since there are more than enough supplies in the United States for the domestic juice market.
Traders said the market’s downward glide will likely persist given the lack of a threat to Florida’s maturing citrus crop.
The next weather threat to Florida will not crop up until the start of the annual Atlantic hurricane season on June 1 when storms could menace Florida’s groves. (Reporting By Rene Pastor; Editing by Marguerita Choy)