Orange Juice Jul '20 (OJN20)
|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, with the remainder being 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) moved sideways in Q1-2019 and posted the high for 2019 in March at 131.00 cents per pound. FCOJ prices then plummeted and sank to a 10-1/2 year low in May-2019 of 90.30 cents. The outlook for a bumper global orange crop and slack demand hammered orange juice prices. Global 2018/19 orange production jumped +10.5% to 53.296 million metric tons as U.S. orange output rose for the first time in three years, up +35.8% to 4.833 million metric tons. Global 2018/19 FCOJ ending stocks jumped +32.2% yr/yr to a 5-year high of 624,000 metric tons. FCOJ exports from Brazil, the world's largest orange producer, fell -17% y/y to 870,000 metric tons in the eleven months ended May 2019. Global 2018/19 FCOJ consumption fell -4.7% yr/yr to an 18-year low of 1.648 million metric tons as high-carb juices became less popular. FCOJ prices remained under pressure and moved sideways the second half of 2019 and finished the year down sharply by -22.3% yr/yr at 97.20 cents.
Supply - World production of oranges in the 2019/20 marketing year are forecasted to fall -10.9% yr/yr to 47.469 million metric tons. The world's largest producers of oranges in 2019/20 marketing year is expected to be Brazil with 31.8% of world production, followed by China with 15.4%, European Union with 12.3%, the U.S. with 10.3%, and Mexico with 9.3%.
U.S. production of oranges in 2018/19 rose +36.1% yr/yr to 124.050 million boxes (1 box equals 90 lbs). Florida's production in 2018/19 rose +59.3% yr/yr to 71.750 million boxes, and California's production rose +12.7% yr/yr to 49.800 million boxes.
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