A trader buys one July futures contracts on orange juice. Each contract is for the delivery of 15000 pounds. The current futures price is $1.40 per pound, the initial margin is $6000 per contract, and the maintenance margin is $4500 per contract.

What price change would lead to a margin call?

Under what circumstances could $2500 be withdrawn from the margin account?

Orange juice is produced mainly from orange trees in Florida. Suppose that the weather in Florida suddenly becomes more volatile and unpredictable so that there is now a greater likelihood of either extremely good or extremely bad growing conditions for future orange crops. Would this increase in weather volatility cause futures exchanges to adjust the level of initial margins for orange juice futures contracts? If yes, then will initial margins be higher or lower than 6000? Briefly explain.