DJ ICE FCOJ Review: Ends Firmer; Traders Digest Recent Gains

Orange juice futures closed with slight gains Tuesday, supported by follow-through buying from Monday’s surge and as traders digested gains made over the past few days. Many traders remain bullish on expectations that the U.S. Agriculture Department will further reduce its Florida crop estimate after a harsh winter season.

Nearby March orange juice rose 55 points, or 0.37%, to settle at $1.5115 on ICE Futures U.S. Most active May added 90 points, or 0.61%, to end at $1.4885 a pound. « We’ve had a pretty nice rally that began at the end of last week and really caught fire on Monday, so I think traders are digesting those gains ahead of the crop report next week, » a broker said.

Tuesday’s close was the strongest in four weeks and puts bulls in the position of targeting the $1.5100 high from Jan. 28, then the $1.5460 peak from Jan. 8, he said. Most traders and analysts expect the USDA to trim its 2009-10 Florida orange crop estimate due to the January freeze. It currently estimates the crop at 129 million boxes, down from 135 million in early January, before the freeze struck.

« It looks like traders are building in a premium in advance of the report, » the broker said. Gains in the commodity sector provided light spillover buying in orange juice, with crude oil and precious metals leading the major indexes higher. No delivery notices were posted against the March futures contract, leaving the total for the period at 435 deliveries, ICE data showed.

Brazil, the world’s largest orange grower, exported 143,300 metric tons of frozen concentrated orange juice in February, up from 95,300 tons in February 2009. It was also up slightly from 140,100 tons shipped in January, Brazil’s Foreign Trade Ministry said. Brazil is the world’s leading exporter of FCOJ.

Despite temperatures well below normal in Florida, no crop-damaging cold is forecast this week, private forecaster DTN Meteorlogix said.

Source : FutureSource