Tuesday, January 10, 2012

Today's Major Market Move: OJ Futures Surge Over 10% in Tuesday's Session

If the Duke brothers had been trading today, the movie would've had a different ending. FCOJ futures surged almost 11% today on reports that detection of an unapproved fungicide in Brazil could result in reduced orange juice imports into the US. Here's more color (of an orange hue) from the Chicago Tribune:
The latest surge appeared related to news reports that the Food and Drug Administration had told juice makers that it would step up testing for the fungicide carbendazim, which is used in Brazil but is not authorized for use in the United States. The reports said the FDA had been contacted by an unidentified company that had discovered low levels in its own juice.

"Brazil used it last year supposedly, and it wound up in some of the orange juice of at least one (U.S.) company processing the oranges," said James Cordier, president of Tampa, Florida-based Liberty Trading Group.

"We lost oranges on the freeze last week but this certainly trumps that," he said. "If they ban Brazilian orange juice OJ has ... another 20 to 30 cents on the upside at least."
Not surprisingly, FCOJ futures were the best performing commodity on the day:

Click to go to the live chart.
However take note that Cocoa futures were not far behind with an 8% gain (the difference between Cocoa and Cocoa LI is that LI is priced in GBP). Cocoa had its own dramatic news event when it was announced that a Nigerian work stoppage would threaten global supplies.

If we look a line chart comparison of the prices of the two commodities, we'll see that Cocoa has a ways to go to get back to its 2011 highs whereas FCOJ has broken out to new all time highs.

Click here to go to the live chart.

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