DJ ICE FCOJ Review: Eases On Profit-Taking, Low Volume

Orange juice futures fell Tuesday, pressured as traders locked in profits from the highs above $1.50 a pound and as Florida’s citrus belt received beneficial rain in recent days. Nearby May orange juice lost 1.25 cents, or 0.82%, to settle at $1.5040 a pound.

Volume was extremely thin, however, and market participants didn’t give much weight to the day’s activity. Instead, traders were focused on the larger markets like the U.S. dollar, gold and crude oil with the Federal Reserve’s announcement on interest rates.

 The Federal Open Market Committee, as expected, held rates steady with no significant change in the language to suggest the currently accommodative rate stance would change any time soon.

« Everybody was pretty much focused on that FOMC meeting, and I don’t think anybody wanted to jump in front of that, » said Spencer Patton, analyst and chief investment officer at Steel Vine Investments in Chicago.

The attention garnered by the Fed announcement meant there was little interest in markets like orange juice, which explains the light volume, he said. Florida’s citrus belt has received ample rain recently, taking topsoil moisture levels to 72% adequate and 22% surplus, with just 1% short and 5% very short, U.S. Department of Agriculture data showed.

Subsoil moisture is rated 67% adequate and 24% surplus. The plentiful moisture is expected to boost tree growth and development as the bloom for the upcoming 2010-11 season begins in some areas, a broker said. Areas of the belt had high winds last weekend, but because the bloom was not yet full they had little effect on flower droppage, the USDA said in its weekly crop progress report.

The Valencia orange harvest progressed, and 15 processors remained open to accept the fruit. In the week through Sunday, growers harvested 1.553 million boxes, up from 616,000 boxes the previous week.

Source : FutureSource