Tuesday, December 12, 2006

Orange Juice - The Bear Approacheth

Orange Juice futures have been in a solid uptrend since the middle of 2004 where prices stated at around 55c per pound, raising to a lofty $2.10ish just a couple of days ago.

Then... yesterdays 9.75c dumpage:

Now, as is obvious in this 5 year continuous chart, it is insignificant and not even enough to get near any trend lines one might draw in... not enough to be even immediately visible on this chart.

However, the fundamental news which precipitated this fall could be significant:

The U.S. Agriculture Department's monthly supply-demand report pegged Florida's
2006-07 citrus output at 140 million (90 pound) boxes, up from the 135 million
projected in its October report, which is a 17-year low.
The trade had been
expecting the data to be flat to 3.0 million boxes lower and were surprised by
the USDA's increased estimate.
"We were pricing in a smaller crop. Instead,
it got bigger so you saw people bail out like crazy," a dealer said. ===>>More<<===

Trends *usually have some underlying fundamental/sentiment reason for reversing and I reckon this could be it; so I'll be looking to see how this develops and perhaps for a low risk opportunity to short.

For the moment, just a heads up.

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