Orange Juice

[DaveT]

BGold -

Like I said, never traded OJ, better set-ups elswhere , IMO.

Take a look at NY Coffee IF it corrects in the next 2-4 weeks. The seasonal February top may be forming, and the next strong seasonal rally is due from early-April thru to Late-May - this could be a very powerful seasonal this year, given the increasing supply tightness and the need for a Brazil weather premium.

I have a Coffee target of 14600-15000 for the May.

 

[bgold]

I am the head OJ trader with my firm, I got my start with my uncle who was a floor trader in the OJ pits. There is a potential profit in this market due to loss of crop due to the hurricanes. The only bearish factor is the amount of juice still in storage @ the major processing plants. I have seen better numbers of actual juice coming out of storage, this could be a strong sign. The institutional traders are short the market right now, this means we may see the market have a short term down trend. my expectations are over the 1.00 range at the end of production. As for the question on weather, there almost no chance of getting frost in march, the end of Feb is your only chance.


Stewart Mann
312-554-3900

trading in the futures market has a risk of loss.

Always interesting to read the views of a "market insider". May I ask how you would interpret current marklet action? Nice gap + close above the Dec highs (basis May) should be good for the bulls? Where would you advise the longs to take profits and hide their stops?
Thanks

 

[josbarr]

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The U.S. Commerce Department agreed to investigate allegations by Florida citrus growers that their business was harmed by $158 million of imports of orange juice from Brazil, the world's top producer.

An "antidumping duty investigation on imports of certain orange juice from Brazil" is being initiated, the Washington-based department said in a statement. Brazil produces 37 percent of the world's oranges and 52 percent of the orange juice, U.S. Department of Agriculture figures show. Most of Florida's oranges are turned into juice.

"We feel we have a strong case, which warrants a thorough investigation," Andy LaVigne, chief executive officer of Florida Citrus Mutual, said in a statement. Florida Citrus Mutual represents about 11,000 growers in the state, which has the largest U.S. orange crop.

The request to impose duties on frozen concentrated orange juice and pasteurized not-from-concentrate juice was filed on Dec. 27 by Florida Citrus Mutual and processors Citrus World Inc., Peace River Citrus Products Inc., Southern Garden Citrus Processing Corp. and A. Duda & Sons. Peace River has since withdrawn its name from the case, the Commerce Department said.

Florida growers allege Brazil's exports to the United States are priced below cost and have harmed the state's citrus industry in the past three years.

Companies that will be investigated include Cargill Citrus Limitada, Citrosuco Paulista SA, Coopercitrus Industrial Frutesp, Frutopic SA, Montecitrus Industria e Comercio Limitada and Sucocitrico Cutrale SA, the Commerce Department said.

Ismar Cardoma and Tito Matos, spokesmen for Brazilian Agriculture Minister Roberto Rodrigues, declined to comment. Government offices were closed Tuesday because of the Carnival holiday in Brazil.

A decision to impose duties may be as early as Nov. 10, the department said in the statement.

 

[StewartMann]

Josbarr,

Do you really have a clue to how the OJ market works or not?

I understand that you can cut and paste a lot of articals that make you seem expierenced, but what do you know about the industry?

 

[bgold]

Subscribe today to the Sun-Sentinel
and find out how to get one week extra!
Click here or call 1-877-READ-SUN.

The U.S. Commerce Department agreed to investigate allegations by Florida citrus growers that their business was harmed by $158 million of imports of orange juice from Brazil, the world's top producer.

An "antidumping duty investigation on imports of certain orange juice from Brazil" is being initiated, the Washington-based department said in a statement. Brazil produces 37 percent of the world's oranges and 52 percent of the orange juice, U.S. Department of Agriculture figures show. Most of Florida's oranges are turned into juice.

"We feel we have a strong case, which warrants a thorough investigation," Andy LaVigne, chief executive officer of Florida Citrus Mutual, said in a statement. Florida Citrus Mutual represents about 11,000 growers in the state, which has the largest U.S. orange crop.

The request to impose duties on frozen concentrated orange juice and pasteurized not-from-concentrate juice was filed on Dec. 27 by Florida Citrus Mutual and processors Citrus World Inc., Peace River Citrus Products Inc., Southern Garden Citrus Processing Corp. and A. Duda & Sons. Peace River has since withdrawn its name from the case, the Commerce Department said.

Florida growers allege Brazil's exports to the United States are priced below cost and have harmed the state's citrus industry in the past three years.

Companies that will be investigated include Cargill Citrus Limitada, Citrosuco Paulista SA, Coopercitrus Industrial Frutesp, Frutopic SA, Montecitrus Industria e Comercio Limitada and Sucocitrico Cutrale SA, the Commerce Department said.

Ismar Cardoma and Tito Matos, spokesmen for Brazilian Agriculture Minister Roberto Rodrigues, declined to comment. Government offices were closed Tuesday because of the Carnival holiday in Brazil.

A decision to impose duties may be as early as Nov. 10, the department said in the statement.

Thanks. Bit confused though on timing of this article? It refers to a Dec27th filing and a decision "as early as Nov 10"? Doesn't seem to be the kind of news which makes a market gap up, doesn't it? I understood that yesterdays' gap was weather related?

 

[DaveT]

MAY Orange juice hits 10100...


UP a whopping 800+ points so far on the day.

Supply/demand report out. MUCH smaller crop estimates, etc. Will look into figures later.

Bgold - did you hold the trade from 8800-9000?

All the Softs are muoving strongly higher now - Coffee, OJ, Cocoa, etc.

CRB leaders? rotating from energies/metals?

 

[bgold]

MAY Orange juice hits 10100...


UP a whopping 800+ points so far on the day.

Supply/demand report out. MUCH smaller crop estimates, etc. Will look into figures later.

Bgold - did you hold the trade from 8800-9000?

All the Softs are muoving strongly higher now - Coffee, OJ, Cocoa, etc.

CRB leaders? rotating from energies/metals?

Stopped out at 9410

 

[StewartMann]

Dave,

You are right, the combo of small fruit, loss of crop, the people who usually pick the groves in Florida are getting better jobs putting roofs on houses, lastly there is talk of reinstating a tariff on foreign juice coming into the states. These combined are pushing this market higher, we could see a few more cents out of the market, then a strong retracement when they realize there is still almost a years worth of juice in the tanks.

 

[DaveT]

OJ Monthly Chart :

Finally breaking out of it's long-term downtrend - a secular trend that's lasted some 15 years or so.

Welcome back OJ.

 

[StewartMann]

Remember with OJ there is only 12 traders in that pit, which means the market can not be traded on just techs. I am going to be shorting the market @106 stop @ 107, if it blows the stop I am going to go long @107. Let's see if it works.

 

[bgold]

Time to go long?

I tipped a toe in the juice pool!

StewartMann, what do you think?

 

[DaveT]

BGold -

Look at the close price correlation between OJ and Crude Oil.

Virtually trading in lock-step over the last few months.

I often use such correlations to my advantage. For instance, if the other market starts to LEAD the market you are trading, you can use it to anticipate a turn in that market.

BTW - I'm curious as to your tendency towards the Orange Juice market (a thin and volatile market,with often bad fills) over Coffee - you stated a while back that you find the Coffee market difficult to trade. Personally, I always tend to avoid OJ and am sticking with this raging Coffee bull market, which I am doing very well out of...

Not that OJ hasn't got potential - It is in a bull market after all...

Good trades to you.

 

[DaveT]

Indeed they have been braodly correlated since last year:

 

[chump]

DaveT,
That's a very interesting correlation you are showing there..as a novice let me ask do you know if there is some undrlying rational behind this..superficially at least I can't see any connection between the two commodities that would explain why they might track together.?

 

[FetteredChinos]

BGold -

Look at the close price correlation between OJ and Crude Oil.

Virtually trading in lock-step over the last few months.

I often use such correlations to my advantage. For instance, if the other market starts to LEAD the market you are trading, you can use it to anticipate a turn in that market.

curiously,

how can you tell when one market starts to lead that it isnt the end of the correlation, in the short term at least?

FC

 

[DaveT]

chump -

I see no fundamental reason for the correlation, other than both have supply/demand imbalances, etc.t's probably a manifestation of broad commodity strength, and the funds making similar moves in and out of both contracts. When I find such correlation, I do'nt try to understand the underlying cause, etc - just note it, file it and add it to my toolkit for trading those markets.

FetteredChinos-

You can't really tell if the correlation is ending , or starting to lag/lead. IMO. Which is why I would only use such signals as one PART of a trading plan - to increase probability of a good entry/exit point,etc. The correlation is a trend, like any basic price trend - the trend is your friend,etc.

 

[FetteredChinos]

thanks Dave..

was hoping you werent going to trade solely off the leader..

i went through a phase of trying to trade the FTSE based on the Dow TA.

that was nasty....

 

[chump]

Thanks Dave .

 

[bgold]

BGold -

Look at the close price correlation between OJ and Crude Oil.

Virtually trading in lock-step over the last few months.

I often use such correlations to my advantage. For instance, if the other market starts to LEAD the market you are trading, you can use it to anticipate a turn in that market.

BTW - I'm curious as to your tendency towards the Orange Juice market (a thin and volatile market,with often bad fills) over Coffee - you stated a while back that you find the Coffee market difficult to trade. Personally, I always tend to avoid OJ and am sticking with this raging Coffee bull market, which I am doing very well out of...

Not that OJ hasn't got potential - It is in a bull market after all...

Good trades to you.

DaveT,
quick response:
1. Contrary to other posters, I am not so sure about the correlation argument. Yes, if it is long term, preferably with some fundamental reasons to support the correlation argument. I would ideally have it supported by statistcal significant correlation over different time frames. Your chart goes back only to Dec04. The high low ranges in crude were 41% (low to high / low) and OJ just 26% (81-102). I wouldn't be surprised if these chart strucures aren't just typical bull market and therefore impulsive (elliott) waves. Wave structure was certainly my reasoning to get in OJ

2. I wish I could play the coffee futures but my money management system/rule is that I trade these softs on daily charts set-up/triggers/stops and want to buy multiples of 2 contracts. I try to take a partial at a nearby target and then adjust stop to entry and let it run with a reasonably wide trailing stop (eg try to avoid being sweeped out). Problem I find with coffee (has happened to me) is that it has dail hi/lo swings of +4 cts (eg $1600+ per contract). And I am not in a position to take $3000-4000 hits on my account (and certainly not in stop sweeps). Fe, I would have bought KC N on a break of 20Apr high at 125 and would ideally want to put stop at swing low of 112.75 which is too much risk for me. Might be a little different if in a solid bull run. OJ contract size is much smaller ($150 per point) and therefore much easire to trade in multiples of 2. I would, however, agree that it is a treacherous market with devious insiders. I therefore hardly ever play it in full size.

 

[DaveT]

Bgold -

thanks for the comprehesive reply.