The United States Department of Agriculture (USDA) publishes estimates each October that forecast orange production for the coming year. However, inflation has the potential to change that. 'hline' : 'quotes' , ... Find exchange traded funds (ETFs) whose sector aligns with the same commodity grouping as the symbol you are viewing. "host" : 'mps.cnbc.com', mps._ext = mps._ext || {}; 'content_id' : '101' , Similarly some blame drought conditions in Brazil on a rise in temperatures. Commodity Funds and ETFs invest in a broad basket of commodities and natural resources, including precious metals, energy and agricultural goods. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Growers often use chemicals and pesticides to protect their crop from insect damages. Florida is the epicenter of orange juice production in the United States, and the state experiences very volatile weather conditions. Producers in Florida take the following steps when making FCOJ: Over 90% of oranges grown in Florida go into juice production in all forms. Food safety concerns can cause supply shocks and higher orange juice prices. return false; mps._queue.adload = mps._queue.adload || []; Trees are frost-sensitive and enter a danger zone if temperatures stay below 25 degrees for extended periods. mps._queue.mpsinit = mps._queue.mpsinit || []; !e;this.xhrGuids&&!this.xhrGuids[n]&&(this.xhrGuids[n]=!0,this.totalCbs+=1)}),f.on("xhr-load-removed",function(t,e){var n=""+p(t)+! Jack Scoville, vice president for Price Futures Group in Chicago, cites very low production estimates from the Florida Citrus Mutual, a trade organization, as reasons for optimism about prices: If the crop is anywhere near that small, even with the lousy [orange juice] demand outlook and things like that, we’ll have a chance to push the market up around $2 [a pound]. mps.scodePath="//fm.cnbc.com/applications/cnbc.com/staticcontent/scripts/omniture/s_code.js?v=1.6.4.1"; They can tolerate drought conditions, but they tend to produce less fruit under extended dry conditions. In the mid-1980s, NFC juice surpassed FCOJ in sales. var s = document.createElement("script"), el = document.getElementsByTagName("script")[0]; } Consumer demand for orange juice is surprisingly more volatile than other agricultural commodities. mps._adsheld.push(adunit) Traders should, however, consider these three risks of investing in orange juice: Experts generally have an optimistic outlook about orange juice prices due to severe supply shortages. However, the Elements Rogers International Commodity Agriculture Total Return ETN invests in a very broad basket of commodities. The two top ETFs in the agriculture space stand out from their peers by a wide margin, but they take very different approaches to the sector. In 2011, Mr. Pines started his own consulting firm through which he advises law firms and investment professionals on issues related to trading, and derivatives. Options are also a derivative instrument that employs leverage to invest in commodities. var pixelurl = ((document.location.protocol === 'https') ? d.setTime(d.getTime() + 60 * 60 * 24 * 30 * 1000); Commodity.com makes no warranty that its content will be accurate, timely, useful, or reliable. Many agricultural commodities trade on stock and derivatives markets. People throughout history have produced juice from oranges, but it wasn’t until more recent history that large-scale orange juice production became practical. ETFs Plays on Orange Juice While there aren’t any exchange-traded products that offer direct exposure exclusively to orange juice prices, there are several ETFs that include orange juice … 'id' : '101' , // By using our site you agree to our Terms of Use. Many scientists attribute increased hurricane activity in Florida to global warming. The FCOJ-A futures contract is the world benchmark contract for the global frozen concentrated orange juice market. The advantage of CFDs is that investor can have exposure to FCOJ prices without having to purchase shares, ETFs, futures or options. mps._queue.adview = mps._queue.adview || []; return _regex.test(_qs); }); The ETF Professor isn't going to take credit for this idea, but he did read an interesting post somewhere else that made the case for increased orange juice consumption as Swine Flu fears … 'is_sponsored' : '0' , Our broker guides are based on the trading intstruments they offer, like CFDs, options, futures, and stocks. })(); Orange juice represents less than 2% of the holdings in this fund. Florida is the epicenter of orange juice production in the United States, and the state experiences very volatile weather conditions. It is also destroyed automatically for you when the symbol is changed. One expert cites record low Florida orange production: It could be pretty bad — lowest since around 1946. There are many potential explanations for this decline. As emerging market countries grow their economies, their demand for orange juice may increase. At expiration, the contracts are physically settled with delivery. Orange juice traders pay very close attention to weather forecasts. This from a Bloomberg article out last week on January 4th, when OJ futures were still trading at $1.7805 a pound. Lawrence has served as an expert witness in a number of high profile trials in US Federal and international courts. }); Mechanical harvesters pick the remainder of the crop. A common grocery orange that comes in several varieties including Cara cara, Bahia and dream navel. Performance charts for UBS ETC linked to Dow Jones-UBS Orange Juice Excess Return Subindex (DJOJE - Type ETF) including intraday, historical and comparison charts, technical analysis and trend lines. In the winter they are dormant and require temperatures higher than 35 degrees Fahrenheit. Investing in a basket of commodities that includes orange juice, other agricultural commodities, metals and energy can accomplish two goals: Although the demand picture for orange juice has been weak in the United States and Western European countries, there is still likely ample demand for orange juice prices to stabilize. The value of a CFD is the difference between the price of FCOJ at the time of purchase and its current price. mps.response.dart.adunits[i].data = ''; 'is_content' : '0' , In recent years demand has been declining precipitously, particularly in the United States. Customers deposit funds with the broker, which serve as margin. Two varieties - the light blood orange and deep blood orange. Sweet oranges are used to produce orange juice and can be divided into four classes: Orange trees are very climate-sensitive plants and need specific temperatures and precipitation levels to thrive. 'cag[symbol]' : '@OJ.1' , Historians don’t know the precise origins of oranges, but Chinese manuscripts from 2200 BC reference the fruit. 'sys_name' : 'blog' , }); }, mpsopts = { Sign up for free newsletters and get more CNBC delivered to your inbox. 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Orange trees do best in areas that receive between 40 to 45 inches of annual rainfall. Therefore, FCOJ remains the benchmark commodity for measuring the price of orange juice. if (mps.response && mps.response.dart && typeof(mps.response.dart.adunits) === 'object') { Before you consider trading cryptocurrencies, you may want to learn about how cryptocurrencies are mined and what experts think about them from our general guides. Just keep in mind that these are … Therefore, FCOJ remains the benchmark commodity for measuring the price of orange juice. 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