DJ Nybot FCOJ Review: Speculative Sales Hit FCOJ Prices Hard

Dow Jones Newswire

Frozen concentrated orange juice futures stumbled to two-week lows Friday as
speculative and fund selling sent prices through support areas and triggered
stops, an analyst said.

Spec and fund sales took many futures markets down Friday, however, and FCOJ
was no exception, said Mike Zarembski, analyst and futures desk manager at XPRESSTRADE in Chicago.

Most-active September juice fell 740 points to $1.6430 a pound, after
reaching a two-week low of $1.6350.

"It was an ugly, ugly day," Zarembski said. "After making a 15-year high
yesterday (Thursday) and then falling apart a bit at the close, speculators
were just bailing out."

Spec and fund sales drove the market into stops around $1.70 and $1.69, which
attracted additional price pressure, he said.

Most futures markets, except cocoa, fell Friday on widespread speculative
selling interest in the commodity markets. "Orange juice was primed for a
correction here," Zarembski said, after traveling to new highs this week.

Market participants are now looking toward Wednesday's release of the U.S.
Department of Agriculture's Florida crop production report -- the last of the
2005-06 season. One FCOJ broker said the government could slash up to 6 million
boxes off its current 153-million-box estimate based on the late harvest,
processing plants closing for the season and a labor shortage. Zarembski said
he expects a more modest production cut of 2-3 million boxes.

Options trading has been active this week, which may suggest there may be
renewed concerns about Florida's new crop oranges. Market talk and trade
estimates peg the 2006-07 crop at 160-165 million boxes, but a dry spring has
some traders thinking the crop could be even smaller, he explained.

Meanwhile, no tropical storms are expected to develop in the Atlantic Ocean
or Caribbean Sea through Saturday, the National Hurricane Center said on its
Web site.

FCOJ futures volume was estimated at 2,510 contracts, with 2,099 calls and
923 put options traded.

The July/September spread reversed and settled at 265 points, July over.

Open interest on Thursday fell 176 to 29,795 contracts. September open
interest rose slightly to 23,942, while July decreased to 166 positions, Nybot
reported.