Oranges, grown on trees, are widely cultivated in tropical and subtropical climates for the sweet fruit. Oranges are peeled or cut (to avoid the bitter rind) and eaten whole, or processed to extract orange juice, and also for the fragrant peel.
The selection of oranges for juice is made on the basis of a number of factors such as variety and maturity of the fruit. Along with natural ingredients that contribute to the overall flavor and consistency of the juice, preservatives and sweeteners may be added. Manufacturers may also fortify juices with extra vitamins or supplemental nutrients such as Vitamin C.
Most of the orange juice sold today throughout the world is reconstituted juice. When water is added to freshly thawed concentrated orange juice it is said to be reconstituted. Concentration is useful because it extends the shelf life of the juice and makes storage and shipping more economical.
The Frozen Concentrated Orange Juice (FCOJ) contract is the world benchmark for the frozen concentrated orange juice market. The contract prices physical delivery of U.S. Grade A juice (with grading performed by the U.S. Department of Agriculture), instore in exchange licensed warehouse in several U.S. delivery points. Allowed countries of origin are the U.S. Brazil, Costa Rica, and Mexico.
The FCOJ futures contract trades at the Intercontinental Exchange (ICE), after it acquired the New York Board of Trade (NYBOT) in 2007. The futures contract trades electronically from 8:00 AM ET to 2:00 PM ET, Monday through Friday.
One FCOJ futures contract is 15,000 pounds of orange juice solids (3% or less). The previous settlement price (June 7, 2012) for July 2012 FCOJ futures was 115.60 or $17,340 per contract.
The futures contract price quotation is cents and hundredths of a cent to two decimals. The previous settlement price (June 7, 2012) reads as $1.1560. The minimum price movement is 5/100 of a cent per pound or $7.50 per contract. Each tick is than $1.50. The next price movement after 115.60 downward is 115.55, followed by 115.50. Therefore a one point move, from 115.60 to 114.60, would be $150.
The performance bond or initial margin requirement to initiate one futures contract is 11.10% or $1,925 (as of June 7, 2012). To control that futures contract going forward the maintenance margin becomes 10.09% or $1,750 (as of June 7, 2012).
The Daily Price limit is ten cents per pound above or below the previous day’s settlement price. For example, the Daily Price Limit to the downside for the Friday, June 8 trading session would be 105.60.
The futures contract month listings are January (F), March (H), May, (K), July (N), September (U), November (X).
The futures contract’s Last Trading Date (LTD) is the 14th business day prior to the last business day of the month. The July 2012 FCOJ futures contract LTD is July 11, 2012 for example. The First Notice Day (FND) is the first business day of the contract month. For that same contract FND is July 1, 2012. The FCOJ contract is physically delivered.
It’s important to note that the Atlantic hurricane crop season occurs from June 1 to November, sharply peaking from late August through September. Major storms can affect the Florida orange crop supply which in turn would affect futures prices.
Visit our Markets section for additional contract specifications and market information regarding the Orange Juice futures market.