Wednesday 5 August 2009

ICE FCOJ Review: Rallies 5.1% On Speculative Buying

ICE FCOJ Review: Rallies 5.1% On Speculative Buying

KANSAS CITY (Dow Jones)--Frozen concentrated orange juice futures rallied to two-week highs Wednesday, as speculative buying lifted the market for a second consecutive session.

Nearby September FCOJ on ICE Futures U.S. rose 470 points, or 5.1%, to settle at 97.55 cents a pound.

Some of the buying was attributed to strengthening technicals and prices running into buy stops, while others positioned themselves ahead of key private crop forecasts scheduled to be released in the next several days.

September orange juice has rallied 775 points, or 7 3/4 cents, since Monday's settlement, as speculative funds jumped back into the market.

Others simply attributed the rally to the fact that prices had fallen to low enough levels to spark buying interest.

"If the specs decide they want to buy orange juice, then it goes up," said a Florida-based FCOJ broker of the gains.

Prices fell below a key 50% Fibonacci retracement zone drawn off the July 17 $1.0485 high to the June 29 75.65 low, which encouraged technical buying. The bullish move pushed orange juice futures into buy stop areas, which attracted additional interest, the broker said.

Traders are anticipating key 2009-10 Florida orange estimates from influential analyst Elizabeth Steger and processing giant Louis Dreyfus within the next week or two. These private projections will be the first of the new crop year, with the U.S. Agriculture Department not scheduled to issue its official estimate until Oct. 9.

Traders also are paying more attention to activity in the Atlantic Basin for potential tropical storm development, though conditions now are clear with no tropical cyclone formation expected in the next 48 hours, the U.S. National Hurricane Center said.

Open interest edged down 90 to total 30,071 contracts, ICE data showed. Traders continue to move positions out of nearby September and into the November contract.

Futures volume was estimated at 4,504 contracts traded, with 657 calls and 238 put options traded.

ICE Settle Change Range (At time of settlement)
Sep $0.9755 up 470 $0.9310-$0.9855
Nov $1.0090 up 460 $0.9640-$1.0180

-By Tom Sellen, Dow Jones Newswires; 913-322-5177;

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(END) Dow Jones Newswires

August 05, 2009 15:20 ET (19:20 GMT)

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