23 Aug 2023

Orange juice futures are trading like a meme stock! The surge is mainly driven by #supply driven (exarcebated by speculators positioning). The 2 supply issues are the following:

1/ Extreme weather intensified by global heating ravaged this season’s crop of the citrus fruit: last year Florida, which produces more than 90% of the US’s orange juice supply, was hit by Hurricane Ian, Hurricane Nicole and freezing conditions in quick succession, devastating orange producers in the Sunshine State. 2/ A bacterial disease -> Florida Producers battled an incurable citrus greening disease that is spread by an invasive insect, rendering fruit unusable. Most infected trees die within a few years, and some producers said they were giving up farming and selling their land. Industry figures said US orange production would reach its lowest level for more than a century. Source: The Guardian, Longview Economics

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