Monday Links: Controlling Your Investment Lizard Brain

If you only have time to catch one more link fest to start your week, make it this one…

Futures Links

Is gold about to move higher? (TheArmoTrader)

Orange juice wakes up…with a 10-cent move up before a bullish crop report akin to the Duke Bros… (LaCrosse Tribune)

The 2013 Q4 demand data confirms cocoa’s bullish end to the year (Bloomberg)

The USDA on Friday: soybeans neutral, corn bullish, wheat bearish (The Poultry Site)

U.S. wheat export premiums hold steady (Business Recorder)

Other Fun Stuff

Controlling your investment lizard brain (Investing Caffeine)

The average hedge fund is an over-priced index fund (Business Insider)

Game of Thrones returns to HBO April 6! (MSN TV)

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Wednesday Links: Can Spinach Save the Florida Orange Juice Industry?

Today’s links begin with a bit of parody: the definitive chart on bubble physiology. Hat tip to @ACTOFCONGRESS on StockTwits.

 bubble chart

Futures Links

The end of the Mexican state oil monopoly could add 2.5 million barrels a day of production, but don’t expect immediate results (Bloomberg)

China rejects 30 percent of U.S. corn shipped due to unapproved GMO strain (Reuters)

Rabobank sees cocoa as top performer and soybeans the worst in 2014 (Agrimoney.com)

A look at how Chinese agriculture reforms may affect the prices of cotton (Agrimoney.com)

Scientists look to GMO to save Florida’s orange crop (BusinessWeek)

Other Stuff

A convincing bear argument for a corporate earnings retreat (John Hussman)

What will it take to keep the stock market flying in 2014? (Market Watch)

Boca Biff: the man who has lived the above “Happy Trading…” chart multiple times (Doug Kass)

Taper expectations: September versus today (Money Beat)

Thursday Links: The Winners and Losers of Federal Stimulus

Articles that struck my fancy today…

More commentary on the O.J. short squeeze in effect (The Options Insider)

Janet Yellen’s congressional testimony…really glad I closed out my short in gold yesterday (Crossing Wall Street)

This is NOT a bubble! (Joe Fahmy)

Farmers in South America hedged early and it’s paying off (Agimoney)

There is ‘nothing bullish’ in coffee (Bloomberg)

The winners and losers of federal stimulus (NY Times)

Orange Juice is Feeling the Squeeze; Can it Recover?

Orange juice has long been a staple of the American diet for decades, particularly at the breakfast table, but that appears to be changing. For the recently completed citrus growing season that ended in late September, retail sales in U.S. supermarkets dropped for the 11th time in the last 12 years. The 563.2 million gallons sold was also the lowest amount in 15 years.

Why are We Excluding O.J. from Our Daily Breakfast Routine?

The answer resides in a combination of factors. In addition to increased competition from a wider selection of juices (think pomegranate) and novelty beverages, the Florida orange groves are experiencing an unprecedented bacterial attack known as citrus greening disease.

Greening disease, for short, essentially cuts off the fruits’ nutrients and prompts them to drop prematurely from a tree. The reduction in production has led to historically higher prices as juice processers purchase 95 percent of the annual orange crop in Florida, encouraging average Joes at the grocery story to spring for cheaper alternatives.

Consumers are not the only ones losing the taste for concentrated orange juice. Speculative interest in citrus remains anemic. The 1983 movie Trading Places featuring Dan Aykroyd and Eddie Murphy that brought orange juice futures to the forefront of the national consciousness is but a fading memory. The WSJ pointed out in August that the average daily trading volume of 2,233 contracts represented a 15 percent decline in the past decade. Today those numbers continued to deteriorate.

An Orange Juice Revival

Despite these factors working against the fruit, orange juice has been making a comeback in the last few months in the commodities market and on the grocery shelf.

The WSJ reports that Americans bought 40.92 million gallons of orange juice during the four weeks that ended October 26, according to the Florida Department of Citrus. That amount is 5.9 percent higher than the four weeks that ended August 3.

On the futures market, the front-month O.J. contract in New York has recovered from a multi-month low of $1.16 per pound on October 28 to around $1.35 today. Coupled with rebounding demand, the industry is seeing worse-than-expected supply issues due to greening disease—a double boost for the bulls.

Crystallizing the impact of the disease, in the USDA crop report issued November 8, the agency projected Florida growers would produce fewer oranges this season compared to any time since 1990. Before the close that day the January contract quickly shot above $1.30.

How Much Higher Can Prices Go?

Taking a look at the daily chart, orange juice on November 12 bumped into strong resistance after touching $1.37 per pound (note the trend line in the chart below). If the January contract can break through this resistance level following the pullback, don’t be surprised by a run higher. From a fundamental perspective, keep a close eye on demand as the bulk of this year’s harvest is still a few months away. By the first quarter we should have a good idea on final production numbers for the 2013-2014 crop.

Orange Juice Daily Chart

OJ Front Month Daily Chart, Mid-May to Mid-November (Click to Enlarge)

Tuesday Links: The 10 Laws of Financial Bubbles

Stuff I’m reading today…

Is coffee bottoming? (Business Recorder)

Soybeans win streak hits five days (WSJ)

Greening disease and a technical double bottom propels orange juice futures higher (Bloomberg)

The anatomy of a textbook pre-crash bubble (Zero Hedge)

Doug Kass: The 10 laws of financial bubbles (The Street)

Jeff Bezos takes the throne as the next Business Folk Hero (Mercenary Trader)

Great. A new drone that can traverse land, sea and air. (Floating Path)