Almond Review - August 2017

Today the Almond Board of California released the July 2017 position report

July shipments were 153.9 million lbs. vs. 138.6 million lbs. in 2016 - up 11%

DEMAND

U.S. shipments: +14% YTD, +12.6% for July

Exports, +17% YTD, +10.2% for July

Shipments for the crop year finished at  2.1 Billion lbs., up 16% vs. the prior crop year.   In the spring of 2016 many were thinking we'd be lucky to reach 10% growth, so this is quite a milestone.  The carry-over was reduced to 404 million lbs., down 4% from a year ago.  Half of this 404 carry-over was sold by July 31 and supply feels tight.

CURRENCY:  The USD is has continued weakening and is at 1.18 to the Euro. 

2017 CROP

Harvest is a week later than in 2016.  The almonds are coming off cleaner and shaking is moving along quickly.  We are just starting to receive the first Nonpareils so we do not have feedback on quality or yields. 

 

California Supply Overview:

                                               2017                     2016                     2015
Carry-In                            404,227,959          412,001,125           376,614,224
Crop                              2,250,000,000      2,135,730,461         1,894,393,765
2% Loss & Exempt             45,000,000           42,714,609              37,887,875
New Crop Marketable    2,654,227,959**    2,547,731,586        2,271,007,989

**2017 figures are a forecast, using NASS Objective Estimate of 2.25 billion lbs.

OUTLOOK:

There was a flurry of activity following the July reports, and then things quieted as many buyers went on vacation.  Recently interest started picking up and the trend should continue as seasonal demand comes in.  The industry is 18% sold on just new crop and 23% on total supply.

Today's shipping figure was strong and in-line with expectations.   Market direction going forward will depend on 2017 crop receipts vs. NASS' estimate, in addition to the monthly shipment reports. 

Upcoming news:  August Position Report - Tuesday September 12

Best regards,

Paul Ewing      Dennis Soares

Further Info:

July 2017 Position Report

Water Supply Update

Almond Review - July 2017

Today the Almond Board of California released the June 2017 position report

June shipments were 177 million lbs. vs. 174 million lbs. in 2016 

DEMAND

U.S. shipments: +14% YTD, +22% for June

Exports, +17% YTD, -7% for June.  

Commitments of 294 million lbs. are up 11.5% vs. a year ago.  With 1.95 billion shipped, the industry has sold or shipped 2.24 billion lbs.; which is nearly 90% of total supply.

CURRENCY:  The USD is still quite strong, but has weakened in recent months.  From a low point of 1.04 USD to the Euro in December, its currently at 1.14.  

NEW DEMAND TREND:

We see exciting new products launched in South Korea, South America and other export markets, where some snack companies are marketing nuts to kids as a healthy and fun snack option.  This has been a largely untapped segment of the world market, with a few exceptions like India.

2017 CROP

Nonpareil hulls are still splitting and indicating a harvest about a week later than last year.  We anticipate shipping new crop Nonpareil in second half August.  

In their survey, NASS found very high double counts.  This could cause making Supreme or even SSR more difficult with certain pollinators like Carmel Types.  David Doll, UC Pomology Farm Advisor, attributes the high double counts to the good early spring (post-bloom) growing conditions. 

Branch 2017 07.jpg

OUTLOOK:

Pricing remained stable heading into the July 6 NASS estimate.  The 2.25 billion lb. estimate was low enough to push 2017 crop pricing up at least .05/lb., on very limited trading.  The industry is roughly 13% sold for the new season.

Today's shipping figure was clearly above expectations, which is one additional bit of bullish news for the market.

Upcoming publication:  July Position Report - Thursday August 10

Best regards,

Paul Ewing      Dennis Soares

Further Info:

June 2017 Position Report

NASS 2017 Objective Estimate

California Almond Objective Estimate:  2.25 Billion Lbs.

Per Acre: 2,250 lbs. (-1%)

Bearing Acres (Trees planted 2014 or earlier):  1,000,000 (+60,000 acres) 

VS. Subjective estimate of 2.2 Billion lbs:  +2.3%

VS. 2016 Receipts to-date of 2.134 Billion:  +5.4%

Nut set per Tree: 5,714:  (-7.2%)

Trees per Acre:  117 (up from 116)

Kernel Weight:  1.57 grams (+3.5%)

NASS found kernels to be wider, thicker, and longer than last year.  The largest kernels since 2010.

Some may be surprised Nonpareil is forecast as the stronger area of the crop, as some were expecting the opposite.  We find the big surprise today the overall nut set per tree being down 7.2% from last season and the lowest in recent history.  This estimate of 2.25 seems neutral or potentially bullish for the market.

Posted here is the NASS 2017 Objective Report

Posted here is NASS' presentation

We will send another update after the June Position Report is released Tuesday July 11

Please feel free to contact us with your thoughts or questions.

Paul Ewing      Dennis Soares