Orange Juice Jul '22 (OJN22)

Description

The orange tree is a semi-tropical, non-deciduous tree, and the fruit is technically a hesperidium, a kind of berry. The three major types of oranges are the sweet orange, the sour orange, and the mandarin orange (or tangerine). In the US, only sweet oranges are grown commercially. These 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 US. Two to four medium-sized oranges yield about 1 cup of juice, and modern mechanical extractors can extract 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 US marketing year for oranges begins December 1 of the first year shown (e.g., the 2020-21 marketing year extends from December 1, 2020, to November 30, 2021). Orange juice futures prices are subject to upward spikes during the US 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 ICE Futures US Exchange. 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 (Barchart.com symbol OJ) posted their 2025 high of 526.15 cents in January. FCOJ prices had early support in 2025 after the USDA in February cut its Florida 2024/25 orange production estimate by -36% yr/yr to a 95-year low of 11.5 million boxes after Hurricane Milton in 2024 wiped out thousands of orange trees. However, trade tensions weighed on FCOJ prices. Canada, the top importer of US orange juice, targeted US orange juice exports in retaliation for US tariffs on Canadian exports. Increased orange production in Brazil, the world's largest producer, also undercut prices after Brazil's 2025/26 orange crop was estimated at 314.6 million boxes, up +36% yr/yr. High prices curbed domestic demand after the USDA reported that US orange juice in cold storage rose to a 2-year high of 340.476 million pounds in June. Orange juice prices continued to decline into Q4, reaching a 4-year low of 132.50 cents in November. Prices recovered slightly into year-end after Brazil's 2025/26 orange crop was cut to 294.9 million boxes in December from 314.6 million boxes in May. FCOJ prices finished 2025 down sharply by -59% yr/yr at 205.20 cents.

Supply - World production of oranges in the 2025/26 marketing year rose by +0.9% yr/yr to 45.919 million metric tons. The world's largest producers of oranges in the 2025/26 marketing year are Brazil (with 29.4% of world production), followed by China (16.7%), the European Union (12.3%), Mexico (10.2%), and Egypt (8.7%).

US production of oranges in 2024/25 fell by -9.9% yr/yr to 58.250 million boxes (1 box equals 90 lbs). Florida's production in 2024/25 fell by -32.4% yr/yr to 12.200 million boxes, and California's production fell by -0.4% yr/yr to 45.200 million boxes.

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