* Market had been expecting colder weather over Florida
* Price slumps 3.8 percent on the day
* Volume barely above norm, indicating likely rebound
NEW YORK, Feb 19 (Reuters) - Orange juice prices fell their most on Tuesday since the year began, after milder weather at the weekend over citrus groves in Florida surprised traders and investors expecting an icy blast.
"It didn't freeze as much as people thought it would this weekend. The market is now pushing out that risk premium," said Sterling Smith, futures specialist for Citigroup in Chicago.
The most-active second-month contract for frozen concentrated orange juice on ICE Futures U.S., May, settled down 4.90 cents, or 3.8 percent, at $1.2490 a lb.
It was the contract's sharpest percentage loss in a day since Dec. 31.
Trading volume, however, came in just a shade higher than the 30-day average, suggesting that not too many had a bearish view of the market and that a near-term snapback was likely.
"This $1.24-1.25 level is fairly good support, and we could rebound on technical buying," said James Cordier, head trader at OptionSellers.com.
Contrary to its December performance, FCOJ has largely rallied in the past six weeks, on a technical recovery and speculative buying.
This year so far, the May contract has risen nearly 5 percent, versus last year's decline of almost 28 percent that made orange juice the second-worst-performing commodity after arabica coffee.
Fundamentally, less citrus production is expected this year. The Florida orange crop for 2012-2013 is seen at around 141 million boxes versus the 146.6 million for 2011-2012, the U.S. Department of Agriculture said in a Feb. 8 estimate.
The USDA issues annual estimates on the orange crop from October, revising the numbers monthly until the end of the season in July and as the crop takes shape. Its first prediction for the 2012-2013 season had been 154 million boxes.
FCOJ's flighty price moves on weather now are unsurprising given the market's sharp rally at the start of last year after citrus-damaging freezes hit Florida.
Prices soared to record highs above $2.20 per lb in January 2012, fueled partly by a temporary U.S. ban on Brazilian juice imports due to the use of a fungicide prohibited in the United States. A steep selloff followed in the coming months, with prices down more than 50 percent from those peaks by May. (Reporting by Barani Krishnan; Editing by Dale Hudson)