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16th January 2020

Latest: Frozen Concentrated OJ Futures

Jack Scoville January update 2020

Futures continue to grind sideways to lower with occasional bouts of short covering to provide relief.  There is not much going on in the market and the price action reflects this fact.  Its been a tough time for brokers trying to excite much interest in trading the market as well.  The market keeps going nowhere or drifts a little lower and this is not something to excite speculators or cause hedgers to do a lot of business.

Futures are probing the lows for the contracts at this time and so far do not seem real excited in making new lows for the move.  That is leading to the mostly sideways trade on the daily and weekly charts.  It has gotten so quiet that the contrarian in me wants to buy!  But, so far I have held back and now might be a time to look at it again.

USDA will produce its annual production report on Friday and the prospects for it to show a very good crop are very good.  USDA has estimated the crop at 77 million boxes for the state of Florida in past reports and that is a strong recovery from the years when the greening disease hit.  It has been a strong recovery in terms of production, but the demand has not kept up.  Americans are still not looking at Orange Juice in general and not really looking at all at FCOJ in particular.  So, the prices keep bumping along at the lower levels hoping some demand will start to appear and soak up all of the supply.

It might take a major change in consumer thinking for that to happen.  Consumers are worried about health and FCOJ and in particular cite the amount of Sugar found in FCOJ.  That is tough for the market to resolve through price.  The market can define the price but can’t make sure that people who do not want the stuff will buy.  So, the price continues to bump along at lower levels and there is really very little reason to expect a change in the near future.

By Caroline Calder Features Share: