Orange juice prices squeeze higher, as production falters

OJ prices squeeze higher, as production falters

5/31/24 11:11AM

Outta juice

There might soon be a vitamin C-shaped hole in many Americans’ breakfasts: orange juice prices are hitting all-time highs, as a series of poor harvests strain the existing supply of frozen juice futures.

Indeed, while the price of OJ has climbed at an alarming rate in recent years due to reduced production yields, this week saw frozen concentrated orange juice futures — which, with a two-year lifespan, usually help manufacturers to ease harvest shortcomings from season to season — reach a record price of $4.87 per pound. That’s roughly 5x where they were trading in 2020.

These juiced-up figures have arisen from a blend of bad weather and disease that’s long plagued the world's orange groves. Brazil has now seen 3 consecutive heatwave-hampered harvests, squeezing the output of the world’s largest producer, which accounts for ~70% of all exports. Just 3 weeks ago, research center Fundecitrus reported that Brazil was set to produce 232M boxes of oranges in the 2024-25 season, a 24% decline on the previous cycle.

And Florida, world-renowned for its oranges, won’t be able to pick up the slack. The Sunshine State has seen output decline steadily for more than 2 decades, thanks to citrus greening, hurricanes, falling yields, and a booming housing market that’s turned citrus farms into premium real estate.

With the orange segment looking increasingly bleak, farmers are exploring using alternative fruits — like mandarins, apples, and mangoes — to supplement diminishing supplies, as consumer demand for OJ remains as strong as ever.

Max Knoblauch52s

Rivian plans its second layoff in two months, cutting more than 600 workers

After laying off about 1.5% of its workforce a month ago, EV maker Rivian is once again cutting staff.

According to the Wall Street Journal, the automaker will let go of more than 600 employees. Rivian had just under 15,000 employees as of the end of December 2024.

Rivian has been looking to cut costs with the expiration of the $7,500 EV tax credit and a new, lower-cost SUV due to launch next year. The automaker has said the end of regulatory credits could hold up about $100 million in revenue.

Rivian lost $1.12 billion in its second quarter and downwardly revised its full-year loss forecast to between $2 billion and $2.25 billion.

Exclusive | Rivian to Lay Off More Than 600 Workers Amid EV Pullback

Rivian lost $1.12 billion in its second quarter and downwardly revised its full-year loss forecast to between $2 billion and $2.25 billion.

J. Edward Moreno43m

Molina sinks on earnings miss and guidance cut, drags down peers Centene and Oscar

Molina Healthcare reported quarterly earnings Thursday morning that severely missed Wall Street estimates, bringing down its stock as well as several of its peers’ that provide coverage for government-sponsored plans.

Molina reported adjusted earnings per share of $1.84, less than half of the $3.90 analysts polled by FactSet were expecting. The company slashed its full-year profit guidance to roughly $14 a share, down from its previous guidance of $19 a share and less than the $18.50 a share analysts are penciling in.

One of the factors driving the underperformance was its Affordable Care Act plans, which were used at higher rates than expected, the company said. A higher portion of Molina’s revenue comes from other federal programs, such as Medicaid.

Molina dropped about 18% in premarket trading. Insurance companies that focus on providing ACA plans, like Oscar Health and Centene, also fell.

ACA plans, which are government-subsidized health insurance for the poor, have roiled insurers this year amid higher-than-expected costs. ACA extensions are at the center of budget negotiations as the government shutdown stretches on.

Max Knoblauch2h

American Airlines climbs as its third-quarter loss comes in smaller than expected

American Airlines shares rose more than 3% in premarket trading on Thursday after the last of the big four carriers reported its third-quarter earnings.

American reported a loss of $0.17 per diluted share, beating analyst expectations of a $0.28 loss per share and improving on the same period last year. The figure came in on the lower end of American’s guidance for a loss between $0.10 and $0.60 per share for the third quarter.

The airline’s revenue came in essentially flat from last year at $13.69 billion, beating the estimate from analysts polled by FactSet of $13.6 billion. Passenger revenue was $12.5 billion, above Wall Street’s expectations.

For its fourth quarter, American is forecasting earnings of between $0.45 and $0.75 per share, beating Wall Street expectations of $0.30 per share. The carrier now expects full-year 2025 earnings per share of between $0.65 and $0.95, again ahead of analysts’ expectations ($0.42).

The improved outlook is still significantly below American’s forecast from earlier in the year, when the airline issued annual profit guidance of between $1.70 and $2.70 per share.

As of Wednesday’s close, American Airline shares had fallen about 31% on the year. Rival Delta Air Lines is down less than 1% in the same time, while the S&P 500 has gained about 14%.

Tom Jones3h

IBM drops after reporting that revenue in its hybrid cloud division grew 14%, slower than expected

After sliding last night, IBM shares have continued their slump into the morning too, down about 7% in premarket trading at the time of writing. This follows a disappointing Q3 revenues report across two of the most keenly watched areas in its software business.

Despite a small headline beat on the top line, investors have since honed in on the fact that revenues in its hybrid cloud unit — home to Red Hat, the enterprise software provider IBM acquired for $34 billion in 2019 — grew 14%, slower than the previous period and below analysts’ estimates of 16%, per Bloomberg. Meanwhile, transaction processing software sales dropped 1% in the third quarter, compounding investors’ worries about IBM’s growth moving forward, per analysts.

Though overall software revenues climbed 10% to $7.2 billion across the quarter (in line with expectations), traders seem unwilling to look past the Red Hat and transaction processing results.

IBM Posts Lukewarm Growth for Red Hat Software Business

Though overall software revenues climbed 10% to $7.2 billion across the quarter (in line with expectations), traders seem unwilling to look past the Red Hat and transaction processing results.

Hyunsoo Rim3h

Quantum stocks soar after report that the Trump administration is in talks to invest directly in the sector

After speculation has swirled for weeks that the US government might consider investing in the quantum sector, discussions are now underway, with the Wall Street Journal reporting that the Trump administration is negotiating with several quantum computing companies about giving the US Commerce Department equity stakes in exchange for federal funding.

Companies in talks include IonQ, Rigetti Computing, and D-Wave Quantum, with each seeking a minimum of $10 million in funding, per the report, while others like Quantum Computing and privately-held Atom Computing consider similar arrangements. The deals "haven't been completed and might change."

A separate source also appeared to contradict the report, per Reuters, with a US Commerce Department official saying over email that it is “not currently negotiating with any of the companies.”

IONQ, RGTI, QBTS, and QUBT all soared double digits on the initial news, but most have pared some of that advance through 8:45 a.m. ET. IonQ and Rigetti are the second and third most heavily-traded stocks in the premarket, trailing only Tesla.

Exclusive | Trump Administration in Talks to Take Equity Stakes in Quantum-Computing Firms