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Orange Juice Stuck in a Rut

Dan Citrus, Industry News Release

orange juiceThe orange juice futures trade is stuck in the biggest rut it’s seen since way back in 1967. The futures closed lower for a record 15th-straight day last Wednesday, with no end in sight.

Domestic demand for orange juice has been shrinking for several years. On top of that, add in a declining citrus crop in Florida, the nation’s number-one supplier, and investor interest has also shrunk because fewer people want to use futures to hedge risk.

Prices have slumped approximately 17 percent in December. The liquidity drain out of the orange juice futures market is even limiting volatility in price swings. The volatility swings were at their lowest point since November of 2014. The Florida citrus harvest is forecast by the government to hit the lowest point it’s been at in the past 73 years.

Surging imports from Mexico and Brazil are making up for the domestic shortfall.

From the National Association of Farm Broadcasting News Service.