A lot of uncertainty, with consumer demand patterns, and Winter weather causing havoc in some regions, reports Jack Scoville, Price Futures Group
FCOJ futures were lower over the last few months. USDA released its world outlook a couple of months ago and it showed the potential for a lot of production against steady or weaker demand. Ending stocks estimates were a little higher for the world. Increased production was noted in Latin America with both Mexico and Brazil expected to produce more. US production is expected to be less than last year but above original expectations. Florida production was estimated at 56,000 boxes or 2.520 million short tons in February.
An abnormally cold air mass moved into the Great Plains and as far south as southern Mexico in the last month. The headlines featured the loss of infrastructure in Texas, but the cold could have injured crops. Most affected would be the crops in southern Texas and northeastern Mexico. It was cold enough to damage flowers in these areas and some of the foliage as well, but probably not cold enough for long enough to affect the trees. Ideas are that the area affected by cold might have lost a little production. These areas have also been dry so the flowers have been delayed and the production losses might not be that much. Western Mexico and into California have also been dry. Central and southern Mexico and Sao Paulo state in Brazil are all in good condition.
Florida weather has remained mostly good for crops. Most areas have seen enough rain for good tree and fruit growth. It has been generally warm in the state this Winter. Production prospects are good even if production is estimated well below a year ago.
The Coronavirus has produced mixed demand results for FCOJ. Consumption from food operations is down a lot as no one is dining out very much. Consumption at home has shot higher. These trends could change soon as the vaccines are finally starting to get around. Life won’t be completely back to normal, but there are hopes that people can finally start to venture out a bit more and maybe even go to restaurants. It’s an exciting prospect to many consumers who have been mostly locked at home for months. The hope is that people will start to consume more FCOJ away from home and in the restaurants, but that will most likely hurt home consumption. The big hope is that consumers will continue to consume more juice even with the end of the pandemic, but this is not guaranteed. Most likely there will be some who stay drinking juice, but many more who stop juice and drink other things or take pills for their vitamins and minerals. The consumption bump might not be that big in the end.
Florida weather has remained mostly good for crops. Most areas have seen enough rain for good tree and fruit growth. It was cold a couple of weeks ago, but not nearly cold enough to cause any damage to trees or fruit. The cold air served more as a reminder of what season is here now. More Winter weather is expected down the road but for now all is good for the trees. It is getting harder and harder to get the fruit, anyway, and producers have moved farther south to avoid any super cold air. It takes a major freeze event in Florida now to put any of the trees at risk. There will still be some speculative buying for the Winter season, but most of that is done now and only small bouts of buying is expected unless a massive cold air outbreak is seen. Crops in Brazil and Mexico appear to be in mostly good condition as Sao Paulo has seen some rains lately and so has Mexico.