DJ ICE FCOJ Review: May Rebounds To Post Small Loss

Orange juice futures for May delivery recovered nearly all of their losses by the close Monday after the contract fell to a session bottom of $1.4765 as traders took profits. Most active May orange juice lost 20 points, or 0.13%, to settle at $1.5165 a pound–near the session peak of $1.5195.

May futures are finding solid support near $1.5000 a pound on a lower Florida orange crop this year due to a mid-January freeze. Prices are also supported because the oranges are small in size and yielding smaller amounts of juice, an orange juice broker said.

The U.S. Agriculture Department last week estimated the Florida orange crop at 131 million boxes, up 2 million from its February projection but down 19% from the previous year. The USDA lowered the average juice yield to 1.53 gallons per box, down 2% from February and an 8% decline from the previous year.

Orange juice futures were down early Monday as traders booked profits near the highs and as showers and thunder showers moved across the Florida citrus belt, bringing 1-2 inches of rain and locally heavier amounts over the weekend. Some areas reported as much as 4 inches of rain.

There were concerns in the market that conditions were becoming dry, with the new-crop bloom beginning in some citrus-producing areas. The weekend rains were beneficial and may help get the bloom off to a strong start, the broker said.

There are still concerns about next year’s crop, however, as it remains to be seen how much stress the prolonged January freeze put on the trees. Too much stress could hamper the crop as trees divert energy to repairing themselves instead of into fruit production. Much of the damage was thought to be confined to the leaves and not the wood, which may lessen the freeze’s impact on next year’s crop.

Source : FutureSource