Orange Juice Jul '19 (OJN19)
|Contract||Orange Juice [FCOJ-A]|
|Tick Size||0.05 cents per pound ($7.50 per contract)|
|Daily Limit||10 cents per pound ($1,500 per contract)|
|Contract Size||15,000 pounds|
|Trading Months||Jan, Mar, May, Jul, Sep, Nov (F, H, K, N, U, X)|
|Trading Hours||7:00a.m. - 1:00p.m. (Settles 12:30p.m.) CST|
|Value of One Futures Unit||$150|
|Value of One Options Unit||$150|
|Last Trading Day||15th last business day of the expiry month|
The orange tree is a semi-tropical, non-deciduous tree, and the fruit is technically a hesperidium, a kind of berry. The three major varieties of oranges include the sweet orange, the sour orange, and the mandarin orange (or tangerine). In the U.S., only sweet oranges are grown commercially. Those include Hamlin, Jaffa, navel, Pineapple, blood orange, and Valencia. Sour oranges are mainly used in marmalade and in liqueurs such as triple sec and curacao.
Frozen Concentrated Orange Juice (FCOJ) was developed in 1945, which led to oranges becoming the main fruit crop in the U.S. The world's largest producer of orange juice is Brazil, followed by Florida. Two to four medium-sized oranges will produce about 1 cup of juice, and modern mechanical extractors can remove the juice from 400 to 700 oranges per minute. Before juice extraction, orange oil is recovered from the peel. Approximately 50% of the orange weight is juice, the remainder is peel, pulp, and seeds, which are dried to produce nutritious cattle feed.
The U.S. marketing year for oranges begins December 1 of the first year shown (e.g., the 2005-06 marketing year extends from December 1, 2005 to November 30, 2006). Orange juice futures prices are subject to upward spikes during the U.S. hurricane season (officially June 1 to November 30), and the Florida freeze season (late-November through March).
Frozen concentrate orange juice futures and options are traded at the Intercontinental Exchange (ICE). The ICE orange juice futures contract calls for the delivery of 15,000 pounds of orange solids and is priced in terms of cents per pound.
Prices - ICE frozen concentrate orange juice (FCOJ) futures prices (Barchart.com symbol OJ) traded sideways to higher the first half of 2018 and posted a 1-3/4 year high in May of 172.45 cents. Global orange production concerns boosted prices after 2018/19 orange production in Brazil, the world's largest orange producer, fell to 275.75 million boxes, down -31% yr/yr and -12% below the 10-year average due to drought. Also, U.S. weather concerns spurred fund buying after Colorado State University forecast that the 2018 Atlantic hurricane season would be above average. U.S. 2017/18 orange production was already decimated by Hurricane Irma with the 2017/18 Florida orange crop plunging to a 73-year low of 45 million boxes, down -35% yr/yr. However, FCOJ prices ratcheted lower the rest of the year as the Atlantic hurricane season remained quiet and U.S. orange crop estimates were raised. The USDA in December estimated that the 2018/19 Florida orange crop would jump +71% yr/yr to 78 million boxes on ideal weather conditions. FCOJ prices finished 2018 down -8.0% yr/yr at 125.15 cents.
Supply - World production of oranges in the 2017/18 marketing year are forecasted to fall -7.6% yr/yr to 49,282 million metric tons. The world's largest producers of oranges in 2017/18 marketing year are forecasted to be Brazil with 35.2% of world production, followed by the China with 14.8%, European Union with 12.7%, Mexico with 9.3%, and the U.S. with 7.3%.
U.S. production of oranges in 2016/17 fell -15.1% yr/yr to 120.420 million boxes (1 box equals 90 lbs). Florida's production in 2016/17 fell -14.0% yr/yr to 68.750 million boxes and California's production fell -15.9% yr/yr to 50.300 million boxes.
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