DJ ICE FCOJ Review: Lower After Choppy Trading Session

Orange juice futures fell Wednesday after a choppy session that saw prices trade on both sides of unchanged. Nearby March orange juice lost 95 points, or 0.69%, to settle at $1.3730 a pound on ICE Futures U.S. May juice fell 65 points, 0.46%, to end at $1.4110 a pound.

May orange juice in early trade hit a two-week peak of $1.4380, but backed down on profit-taking once the buying support evaporated, a broker said. « Orange juice is just kind of dinking around and seems comfortable to hang at these levels for the minute anyway, » said Jack Scoville, analyst and vice president at Price Futures Group in Chicago.

Fundamentals for the market remain strong, with Florida growing one of its smallest crop in 20 years because of freeze damage in January. In addition, there is a strong likelihood that the state will produce another small crop next year as trees divert energy to repair themselves from freeze damage rather than into fruit production.

The orange juice market will likely remain in recent ranges until the March 11 U.S. Department of Agriculture’s crop production report, which many traders and analysts expect will show a further decline in the 2009-10 Florida orange estimate. The USDA currently projects the crop at just 129 million boxes, a 6-million-box decline from its December estimate.

The market could make another run at the Jan. 11 high of $1.5815 a pound, though that may be tough to accomplish during the harvest, said Scoville. Once the harvest is complete in June, however, prices could make another stab at the highs.

Temperatures across Florida’s citrus belt continue to run below to much below normal. No damaging cold is expected, but there is a chance for scattered frost on Friday morning, private forecaster DTN Meteorlogix said.

Source : FutureSource