Group 13
WSJ Orange Juice Futures Climb as Storm Brews
How much did orange juice futures rise on Thursday before falling back again?
The futures rose up to a max of 7.5% at the price of $1.1575 a pound before they fell back again. The article states that it hit this high before “retreating to settle just 1.5% higher at $1.0925.” These gains were a turnaround from the day before when orange juice futures slipped to their lowest level in 10 years.
What drove orange juice futures prices higher on Thursday? What other factors would you expect to have an impact on orange juice futures prices? Explain There was multiple reasons that the futures price of orange juice rose higher on Thursday. Initially, the article states that “worries of a tropical storm could be headed for Florida’s citrus groves sent orange juice futures prices higher.” Furthermore, The article states that the prices rose on “some traders who had bet that prices would fall closed out their positions as the market turn up, either to lock in profits or minimize losses if the futures continues to climb.” The article continues by stating that the recent volatility in
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This is done by taking a position in a futures contract that offsets potential adverse price fluctuations. Speculators, on the other hand, bet on the direction that the price of an asset will move with the intention to earn substantial profit. Both play a role in the futures market. A futures contract requires two counterparties. One one end there is the hedger whose goal is to transfer risk and on the other end there is the speculator who is willing to assume the hedger’s risk in hopes that they will earn a profit. Without both parties the futures market would not exist. In addition, the supply and demand relationship between the two allow for the liquidity of futures and contribute to the functionality of this
The acai berry is a unique fruit that mostly grows in the Amazon; this limited product is wanted all over the world. The current acai berry industry is popular but has caused price problems in the domestic market. The popularity of the acai berries caused the demand to increase drastically causing a shift in the market equilibrium. This in turn has caused the price to increase as new consumers are buying the berry seen in figure 1.
Tampa is a major business center, which it could explain why the demand rate of weekdays was always higher. Realizing the demand rate was higher, we set a relatively high price during the weekdays because business travelers are not sensitive to price changes. It may due to the fact that they are not paying out from their personal budget and thus tend to get whatever that are available to them without concerning of the price. For this reason, our weekday price fluctuates significantly based on demand forecast. However, we learned to keep the price to $30-32 for the weekends due to a higher volume of leisure customers. They are more price sensitive and we assumed that they are trying to find a better alternative for their vacation. Due
We the consumer would rather pay less for any product that is needed or want. Ultimately we are the reason for high prices as well as low prices. Prices of products do not always stay the same and more popular products have higher prices than less popular products. These fluctuations, high prices and low prices are from the idea of supply and demand. Supply and demand defines the effect that the availability of a particular product and the desire or demand for that product has on price. Generally, if there is a low supply and a high demand, the price will be high (Investopedia). To understand the idea of supply and demand, the understanding of supply and the understanding of demand must be defined. The Law of Supply states that at higher prices, producers are willing to offer more products for sale than at lower prices, also that the supply increases as prices increase and decreases as prices decrease (Curriculum Link). The Law of Demand states people will buy more of a product at a lower price than at a higher price, if nothing changes, at a lower price, more people can afford to buy more goods and more of an item more frequently, than they can at a higher price and that at lower prices, people tend to buy some goods as a substitute for others more expensive (Curriculum Link). In todays economics these ideas are seen frequently in everyday life. The laws of supply and demand are seen in many ways in the company Apple Inc. Each year Apple Inc unveils a long awaited mobile operating system and IPhone. We can also see many aspects of the law of supply and demand in Nike Inc’s Jordan Brand. Jordan Brand has released a number of...
have gone up by a lot in the last few months, but is that unfair? Prices still
Pennings, Joost M.E. Research in Agricultural Futures Markets: Past Present and Future. Presentation Paper: Wageningen Agricultural University: Netherlands. 8 June 2001.
It tends to be high in pharmaceutical business as main sales are done using whole sales. Institutions that purchase drugs in large quantities are considering the discounts that drug producers are willing to give and therefore are able to influence price. As long as Eli Lilly have competitors with similar products it is obvious that bargaining power of buyers is high for the industry. Buyers with smaller volumes of purchases do not influence price policy, but such buyers are outnumbered by wholesale buyers. It is also important that people purchasing drugs for themselves are usually covered by healthcare insurance and therefore are not interested in pulling price down. Yet the volumes of sales to such buyers are not significant.
The Odwalla Juice Company was founded back in 1980 when three friends Greg Steltenpohl, Gerry Percy and Bonnie Bassett started squeezing fresh oranges on a hand juicer. It did not take long for the people of Santa Cruz to start talking about the fresh taste of Odwalla. The company established tremendous brand loyalty and profits were rising 30% per year. Before they knew it, the company that the three friends had built from home was worth more than 90 million dollars (Baker, 1998). The Odwalla juice buzz spread quickly around the increasingly health concious market because of they unique acid based rinsing technique they used. The majority of other companies used a pasteurization method which the Odwalla team argued that pasturization “affected the taste of the juice and was unncecessary” (Melvin, 2011, Pg. 656).
Customer loyalty is another competitive advantage. Trader Joe’s doesn’t provide membership card to the customer, however customer still would like to choose Trader Joe’s just because of this
When evaluating the propane shortage from an economic point of view, one would notice that the price increase reflects the law of supply and demand in action. Regrettably, propane consumers need more propane due to the weather, despite the decreased supply to the Midwest due to pipeline maintenance and increased propane use to dry crops during the fall harvest.
Supply and demand is what determines the market prices of various items. Whenever the supply is greater than demand the price of the goods must be lowered. In contrast, when the demand is greater than the supply the prices must go up (Funk & Wagnalls New World Encyclopedia, 2015). For example, during the Mardi Gras season in Louisiana the price of a top notch King Cake is about $19.99-$29.99. Depending on the seller. Once Mardi Gras season is over and Lent season begins the demand decreases resulting in the
Ever since 1965 Gatorade has been one of the top selling energy drinks in America. Gatorade has come a long way since its start and is now the official drink of several professional sport leagues. The company brings in over three billion dollars worth of revenue every year mostly due to their skill in advertising which is a crucial part of a company of such magnitude and Gatorade is known for their persuasive commercials. In the commercial chosen, several stellar professional athletes give the viewers details of some of their greatest failures. This caused each of them to work harder and become the athlete they are today by training harder and making them more determined. The Gatorade commercial that was chosen is a very effective ad because
Our large purchasing power allows us the opportunity to consolidate our purchases and create futures contracts for a better price. This can help sustain our margins in a weaker economy, or hedge against a great increase in coffee purchases driving the demand and price of beans up.
...l remain neutral in the price range and nobody will have to worry about it. New factors may come up that affect the price of cotton though because various factors will always cause the price of cotton to fluctuate.
Since the listing of KOSPI 200 futures in May 1996, the derivatives market has grown into one of the key derivatives markets in the world. In the meantime, the market has achieved a higher level of excellence in market operation and secured a trading system and fair market management, and consequently figures as a decent reference among derivatives markets. The brief history of Korean derivatives market related to the products is as follows:
...n the companies will have to decrease the price otherwise the product will not be sold at higher prices and the revenue would not be as large as companies would like to.