wmeubank@ocp.kcmo.com
PRUDENTIAL SECURITIES, INC.
One New York Plaza, New York, New York
(October 13, 1997) FROZEN CONCENTRATED ORANGE JUICE: The USDA's first forecast of 1997/98 Florida output, released October 10, was a record 254 million boxes, up 12.3% versus the previous record set in 1996/97. The figure was in line with the August forecast at 253 million boxes (released by a private forecaster) and fell well within expectations of 240-260 million boxes. The FCOJ Florida yield for 1997/98 was foreseen at 1.55 gallons per box at 42.0 degrees Brix; the final yield for 1996/97 was 1.57 gallons. The USDA's forecast of overall 1997/98 U.S. production was 330.6 million boxes, up 11.5% versus the year- ago level; most of the increase was accounted for by the Florida forecast.
Even though the USDA's Florida forecast was in line with expectations, prices fell sharply in response to the report, extending the long-term bearish trend. We continue to look for lower prices. We would want to see November futures trade through 75.0 cents per pound to become somewhat more convinced that a price turnaround is at hand.
Arthur Stevenson
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