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ICE FCOJ Review: Firm; Follow-Through Buying, Weather Concern

DOW JONES NEWSWIRES

Frozen concentrated orange juice futures rose on follow-through technical buying and on concern over a tropical depression in the central Caribbean Sea, brokers said Monday.

ICE Futures U.S. September orange juice rose 220 points to settle at $1.0800 a pound and November added 130 points to end at $1.0900.

"Volume was pretty light, so it didn't take much to move prices, but there's a tropical depression that's just formed and I think with Fay hitting Florida traders are beginning to get skittish," one broker said.

After Tropical Storm Fay inundated Florida with flooding rains, news of tropical depression seven forming Monday helped take FCOJ prices higher. The depression is about 250 miles south of Santo Domingo and continues to show signs of strengthening, National Hurricane Center forecasters said Monday. If it strengthens into a tropical storm, it will be named Gustav.

"Even if this system fails to make it to tropical storm status, it is yet another sign that environmental conditions in the Atlantic Basin continue to become more conducive to storm formation," another broker said.

Another system of disorganized clouds and showers is located several hundred miles northeast of the Leeward Islands, but upper-level winds are currently not favorable for tropical cyclone development, the NHC said on its Web site.

In other news, funds slightly increased their net-short position in the week to Aug. 19, taking it to 723 contracts from 716 the previous week, the Commodity Futures Trading Commission's Commitments of Traders report showed. Funds are now 1.6% net short, up from 1.4% last week.

FCOJ movement decreased in the week to Aug. 16, falling to 2.039 million gallons from 2.654 million the previous week, the Florida Department of Citrus said in its movement and pack report. FCOJ imports spiked, totaling 2.025 million gallons, versus 587,165 the previous week.

FCOJ inventories, meanwhile, increased to 124.318 million gallons from 124.304 million last week.

FCOJ open interest Friday fell 210 contracts to total 31,122, ICE reported. Traders liquidated 819 September positions but added 532 to the November contract.

Futures volume was pegged at 2,271 lots, with 356 calls and 22 put options traded.

 
 ICE          Settle     Change     Range (At time of settlement) 
 Sep         $1.0800     up 220     $1.0510-$1.0815 
 Nov         $1.0900     up 130     $1.0725-$1.0930 
 

-By Tom Sellen, Dow Jones Newswires; 913-322-5177; tom.sellen@dowjones.com

(END) Dow Jones Newswires

August 25, 2008 14:15 ET (18:15 GMT)


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