Orange Juice Futures Digest Florida Rain

Orange juice futures rallied from about 70 cents to 95 cents within a three-month period, mainly due to droughts in Florida. It is an understatement to say is was dry on Florida for the last few months and that must have caused some damage to the orange juice crop this year. It will take some time before we know the amount of yield loss this season, but there certainly should be some.

It may be safe to say the drought has been busted in Florida as it has been raining nearly everyday for the last week and a half. The rain will help the crops, but the damage has been done. This may be evident with orange juice traders, as futures prices have dropped only mildly in the last week. If this was soybeans in drought conditions during the middle of July, and the Midwest just received a week of heavy rain, you can bet soybean futures would be tanking.

There may be other underlying factors at work with orange juice. Prices had dropped tremendously over the last year and maybe the market reached a solid value level and price had to bounce. Also, orange juice futures have moved higher along with most other commodities during the last couple months. Orange juice prices may have hit a long-term bottom, especially if it can hold the gains from the last two months.