Orange Juice Futures - Free Money Long $JO
As a speculator I look into the logic behind JJO supply and demand. At price levels it changes hand and the climate outlook.
Lastly the technical outlook and CFTC positioning.
United states imported %66 of it's JO demand from Brazil in 2017 and as citrus greening and grove renewal is continuing to cap Florida producers. Leaving the U.S heavily dependent on imports in particular Brazil going forward.
Brazilian Real (BRL) lost significant value to the run up to the Brazilian elections and dragged many soft commodity prices lower this year creating a cheap buying opportunity. Since the elections have passed , BRL has been steadily on the rise. Across all indicators and positioning it is clear that BRL upside momentum is set to prevail. Which will support JO prices as importing the product will be more expensive.
CFTC data positioning is signaling a clear selling exhaustion at the low 140s. As citrus acid demand is increasing globally, U.S JO demand greatly import reliant from Brazil and BRL on the rise. Commercials are inclined to hedge JO futures keeping the commodity bid.
Technical analysis shows JJO found a floor on the weekly chart. Printing a clear reversal hammer chart pattern which has increased likelihood swinging prices back up. The reversal originated from short covering. A dynamic where short contract holders close their positions and therefore pushing prices back up. We have reasons to believe that this short covering trend is set to continue.
Lastly the technical outlook and CFTC positioning.
United states imported %66 of it's JO demand from Brazil in 2017 and as citrus greening and grove renewal is continuing to cap Florida producers. Leaving the U.S heavily dependent on imports in particular Brazil going forward.
Brazilian Real (BRL) lost significant value to the run up to the Brazilian elections and dragged many soft commodity prices lower this year creating a cheap buying opportunity. Since the elections have passed , BRL has been steadily on the rise. Across all indicators and positioning it is clear that BRL upside momentum is set to prevail. Which will support JO prices as importing the product will be more expensive.
CFTC data positioning is signaling a clear selling exhaustion at the low 140s. As citrus acid demand is increasing globally, U.S JO demand greatly import reliant from Brazil and BRL on the rise. Commercials are inclined to hedge JO futures keeping the commodity bid.
Technical analysis shows JJO found a floor on the weekly chart. Printing a clear reversal hammer chart pattern which has increased likelihood swinging prices back up. The reversal originated from short covering. A dynamic where short contract holders close their positions and therefore pushing prices back up. We have reasons to believe that this short covering trend is set to continue.
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