"Hi David, first of all congrats for your excellent service. in the morning I always listen to your audio and can't think of any better start to a successful(lermoney) day! tkx a lot! my question is regarding Orange Juice Futures: Eoin mentioned the other day the break-out of the bottoming process which faded a little bit. must be traders heaven. what's your opinion/experience with that contract? tkx for your feedback,"

David Fuller's view Thank you for your generous comments and the witty combination of an adjective and our brand name above.

I have always regarded orange juice futures in December and January as a long-shot weather punt, because that is usually the period of greatest climatic vulnerability for the Californian and especially the Florida crop. This is particularly true if the price is low (below $75) because significant weather damage from a freeze is an outlier rather than probability, as you can see from this long-term chart.

The inflation bias raises these floors over the longer term but not sufficiently to cause orange juice's recent prices to be historically low, although they were bouncing from the psychological $100 level in the potential manner of base development.

I think the latest pullback reflects the diminishing odds of a cold or stormy weather related bull run. We will probably see some support near last year's lows, and perhaps a further small bounce, but I would not expect to see another test of $140 without a crop scare, which is probably a diminishing possibility over the next few months as the US crop matures.

Interestingly, most food commodities have been weakening in recent months, albeit often from previously very high levels. This trend is confirmed by the Dow Jones UBS Agriculture Index. Somewhat lower prices for agricultural commodities, should this trend continue, would reduce inflationary pressures, not least for developing economies, and be generally good for global GDP growth. Here is a related article from Bloomberg: Cold Weather to Boost India Wheat to Record for Seventh Year.