Orange Juice Sep '22 (OJU22)
|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|
|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) began 2021 on the defensive and fell to a 1-1/2 year low in February of 104.65 cents. The outlook for stronger global orange production weighed on prices after the USDA forecast global 2020/21 orange juice production would jump +17.3% yr/yr to 1.812 million metric tons in late January. FCOJ prices then moved sideways into mid-year. The upside in prices was limited after the USDA in June unexpectedly raised its Florida 2020/21 orange crop estimate to 52.7 million boxes from a May estimate of 51.7 million boxes. FCOJ prices soared in Q3 and posted a 3-year high in September at 148.00 cents after frost damage in Brazil, the world's largest orange grower, devastated the country's orange crop. Brazil's 2020/21 orange crop was cut by 30.7 million boxes in December from a May estimate to 264.1 million boxes. Also, greening disease plagued the U.S orange crop as the USDA forecasted the U.S. 2021/22 orange crop would plunge by -16% yr/yr to 44.5 million boxes, a 77-year low. FCOJ prices finished 2021 up +18.7% yr/yr at 146.30 cents.
Supply - World production of oranges in the 2022/22 marketing year are forecasted to rise +2.9% yr/yr to 48.838 million metric tons. The world's largest producers of oranges in the 2021/22 marketing year are expected to be Brazil with 33.8% of world production, followed by China with 15.6%, the European Union with 12.5%, Mexico with 8.8%, and the U.S. with 7.3%.
U.S. production of oranges in 2019/20 fell by -3.6% yr/yr to 121.940 million boxes (1 box equals 90 lbs). Florida's production in 2019/20 fell by -6.3% yr/yr to 67.300 million boxes, and California's production rose +2.1% yr/yr to 53.300 million boxes.
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