Ahead of the next USDA release, I ran some quick numbers and feel pretty comfortable with an estimate of 170-171 mm boxes (the Florida ‘all-orange’ number). The following reasons support this:
- Weather has been better than last season. Very little frost threat in January and the outlook appears to be favorable looking into Feb.
- A better moisture pattern is being seen by the growers. Groundwater levels have started to recharge, and weekly rainfall totals in Dec. have been higher than last year and normal. Further, the outlook for weekly rainfall looks favorable during pre-bloom and bloom temperatures for the start of the bloom period (Feb. into early March) look to be a positive for growers.
- There is some dryness still in western FL, but if we look at the major producing counties, the moisture profile has improved substantially.
- Better bloom weather can push my numbers up a bit more, and I can re-evaluate during mid-bloom.
I think most of the recent activity that is supporting strength in FCOJ futures is a reaction to the steep decline that we have seen over the course of 2008, and more particularly in the last 6 months. Prices have gone from the mid 130s (c/#) down to below 70 in less than 6 months.