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COMMODITY REVIEW AND OUTLOOK
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(July 2, 1997) ORANGE JUICE: Medfly reports continue to buzz around, but September OJ continues to encounter selling. Supplies remain burdensome, with the Medfly getting press, but not serious attention from the market. For the time being, treat rallies as selling opportunities.
RECOMMENDATION–It is unlikely that much will occur to change OJ's trend to higher until we start to approach the freeze season. If you're a bull and aggressive, consider near the money calls, or buying current levels with stops under 7405 basis September. Be alert for a failure near 7700-7800. Conversely, expect support to develop near 7000 basis the nearby. A negative is the inability to penetrate and hold the 7780 high. Overhead resistance is near 7800, 8020, and 8245. Trading above 8020 is suggestive of an attempt at the 8200's. Aggressive bears should continue to sell September OJ on 100-200 point rallies. Use stops of 100-200 points. Look for new lows, possibly to the 6500 level basis the nearby. Long-term bullish option traders might contemplate buying calls, but I would strongly consider selling nearby calls to pay for the time premium. Florida rarely experiences freezes in September or November.
M. Steven Morgan
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Last updated on 07-04-97
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