Having just crushed the juice and shut down in July, orange juice tanks are full and frozen concentrate orange juice futures have declined to $0.98 per lb. in August from $1.38 in January. “It’s as cheap as it has been in years,” says Jack Scoville, vice president of Price Futures Group. “Demand has been slow and supply has been increasing.” In the last couple years, hurricanes and greening disease had beaten down the orange crop and the resulting combination of tighter supply and high prices killed demand. “But this year, the weather has been perfect,” he says, adding that fruit sizes have been good, and production looks to improve in the coming year by 20 million to 25 million boxes. “I could see it going down to about 92¢. Your best resistance is up around the $1.12 area right now,” Scoville says.
“The losses are getting smaller,” chuckles commodity hedge consultant Don Singletary. “Retail prices are coming down for the first time in years, and retail sales are improving,” he says, adding that the market is nearing a bottom. In September, he says the market likely will be flat but that as we enter storm season, prices could experience acute volatility and a threatening tropical storm could drive prices as high as $1.25.
