The Frozen Concentrated Orange Juice (FCOJ) futures have been trading sideways for since last winter’s Polar Vortex spooked the market. What we’ve seen since has simply been a range bound, unexciting market to which, I say, “Thank you!” Trading for a living isn’t about excitement. It’s about making an easy living in the toughest way possible. Therefore, when a trade sets up with our methodology in a low volatility environment, I can be reasonably sure that even if I’m wrong, it will be manageable. Today’s orange juice trade combines our Commitment of Traders (COT) Buy signal along with some late winter seasonal analysis from Moore Research.
Orange juice futures sold off this summer as is normal during the primary growing season. Fundamental analysis in this market by the commercial traders via the weekly Commitment of Traders report clearly shows that long hedgers are locking in future input prices as they believe that OJ is a buy under the $1.45 area. You can see their excitement kick in once the market fell below $1.45 in mid-June.
We went into more detail including orange juice futures seasonal and expiration analysis in our piece for Equities.com.