DJ ICE FCOJ Review: Rallies 2.3% On Continued Crop Concern

Orange juice futures bucked the weak commodity trend and rallied 2.3% Wednesday over ongoing concern about how much of the Florida orange crop was lost to the mid-January freeze. Nearby March orange juice rose 3.3 cents to settle at $1.4615 a pound, off the intraday high of $1.4705. This was the highest price the contract had been since Jan. 8, when it hit $1.5115.

Ideas that crop and yield losses were more pronounced than first thought have driven orange juice prices back up near their highs, after initial reports on Jan. 11 said the crop fared better than expected and pressed prices sharply lower.

« There’s still speculation on the damage to this orange crop, » said Joseph Ricupero, broker/analyst at R.J. O’Brien in New York. Orange juice prices have been lifted by the fact that the 2009-10 Florida crop–estimated at 135 million 90-pound boxes–will likely be the second smallest in a decade and is expected to shrink further after the U.S. Agriculture Department assesses the damage.

The USDA will issue its February crop production report on Feb. 9. Until then, traders continue to build into futures prices what they view as the extent of harm to the crop. Many traders believe the freeze may have knocked five million to seven million boxes off of 2009-2010 production.

Still, Florida juice inventories remain ample at 118 million gallons in the week ended Jan. 16, up from 116 million the previous week, data from the latest Movement and Pack report shows.

Source : FutureSource