OJ Prices Squeeze Into Blue-Sky Breakout As Food Inflation Fears Soar 

Tyler Durden's Photo
by Tyler Durden
Saturday, May 25, 2024 - 01:55 PM

Orange juice futures in New York surged to new record highs on Friday morning, with prices squeezing over 30% in just a few short weeks. The latest price jump comes as citrus crop troubles across Brazil and the US continue to worsen global supply fears

The price of orange juice futures has soared to records, adding strain for consumers of the staple breakfast beverage. Citrus-crop woes in Brazil and the US are helping to fuel the relentless surge higher. Brazil is expected to see its worst orange harvest in 36 years, which will have a dramatic impact on global juice supplies — the South American nation accounts for about 70% of total exports of the beverage. In the US, Florida's orange groves have also suffered from decades of damage from disease and weather, putting limits on supplies from the top US juice producer. -Bloomberg 

According to Bloomberg data, OJ prices rose 10 cents, or 2.14%, to $4.765/lb, the exchange limit. Prices are in blue-sky breakout territory. 

As of 0912 et, the futures spread for July FCOJA-A versus Sept. FCOJA-A widened 1.75 cents/lb to 19.25 cents/lb. This is a sign of a market fraught with supply fears. 

This long timeframe view of OJ futures shows prices have hyperinflated nearly 400% since early 2020. 

The most recent driver of the price surge: Sliding production in Brazil. Let's not forget about collapsing production in Florida. 

Ignore hyperinflating food prices. No alarm bells here... 

Whoops! But Democrats say food inflation is caused by 'greedy' corporations. 

Enjoy higher prices. Inflation is sticky.