Almond Review - December 2017

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

November shipments were 228.5 million lbs. vs. 187.5 million lbs. in 2016 - up 21.8% 

DEMAND

U.S. shipments: +17% (+5.8% YTD)

Exports: +23.7% (+4.6% YTD)

U.S. buyers report excellent almond consumption.  With the late harvest and challenging quality, handlers could finally get sufficient product out the door to meet pent up requirements. 

Europe was up 27% for the month, likely for the same reasons as the U.S. market.  The 12% growth YTD is very similar to the last season's growth of 10%.  The almond industry continues to invest further in promoting consumption in the region, with ABC programs in the U.K., France, Germany, and a new program just starting in Italy.  

India shipments were nearly 30 million lbs. vs. 6.9 last November.  They are up 24% YTD at 110.4 million lbs.  Supply was already reported to be high in their local market, so today's figures are expected to quiet the Indian market for the near future.  

China (including HK/Vietnam) was down 7% for the month and down 13% YTD.  With the Year of the Dog coming up in China, New Year celebrations start 19 days later.  We expect a huge jump in December shipments to the region.

2017 CROP

Receipts YTD reached 1.993 billion lbs. vs. 1.930 billion YTD 2016.  For the month, receipts were 464.2 million lbs. vs. 371.7 in Nov 2016.  

For the past 4 years, end Nov receipts ranged from as low as 86.4% of final receipts to as high as 92.7%.  End December receipts have a narrower 4 year history range of 96.3 - 97.7% of final receipts.  So with the next position report we should have better insight into final receipts, but for now will continue to use the NASS estimate of 2.25 billion lbs.

Bud Set 2017 12.jpg

 

REVIEW & OUTLOOK:

Sales during November were 212 million lbs. - approximately 9% of the crop Very strong sales compared to the 150 million lbs. sold in November 2016, yet the market was flat due to steady selling interest.  

Shipped/Committed reached 1.494 billion lbs. (up 149.7 million lbs.)  This is 57.4% of total supply (vs. 53.7% a year ago) or 67.8% (vs. 64.2%) of saleable supply.   This puts most sellers in a comfortable sold position.

Water:  The good news is California reservoirs are at strong historical levels.  However, rainfall is about 1/3 to 1/2 of normal in the San Joaquin Valley regions and the Sierra Nevada snow pack is 37% of normal.  The warmer / drier winter is starting to have a slight impact on the market.

Today's shipments were above expectations and December is expected to be another strong month.   A minor firming may take place following today's report.  

Happy Holidays,

Paul Ewing      Dennis Soares 

Upcoming news:  December Position Report - Thursday January 11, 2018

Further Info: 

November 2017 Position Report

Water Supply Update

Almond Review - November 2017

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

October shipments were 246.5 million lbs. vs. 235.6 million lbs. in 2016 - up 4.6% from what was the largest shipping month in history.  

DEMAND

U.S. shipments: +6.3% (+2.5% YTD)

Exports: +4.1% (-1.4% YTD)

CURRENCY:  The USD strengthened slightly, currently at 1.166 to the Euro (vs. 1.18)

2017 CROP

Receipts YTD were 1.529 billion lbs. vs. 1.56 billion YTD 2016.  With some increased efficiencies and hulling capacity in California, about 117 million lbs. more were received vs. October 2016.  

Bud Set 2017 11.jpg

 

REVIEW & OUTLOOK:

Sales during October were 201 million lbs., up 10% from a year ago, with over 3/4 of these coming from export markets.   With moderate buying activity, and plenty of selling support, pricing softened, particularly on lower quality grades.  Pricing was very stable heading into today's report. 

Shipped/Committed reached 49% of total supply (1.28 billion lbs.) -  maintaining a similar pace to last year.  

China is behind on shipments (-12%) due to their later Chinese New Year and the timing should help boost the November/December figures.  It seems handler capacity is very booked up for November.  With the December position report (due January 11) we should have a much better grasp on consumption and the 2017 crop size.  At the rate we are going, about 60% of the crop should already be sold by then.   

Today's news is right in-line with expectations and should be neutral.  Short-term pent-up demand coming in (including from China), or a more widely perceived strong outlook for November, could potentially bring some strength to the market.  On the other hand, continued selling support may hold back too much firming.

Best wishes,

Paul Ewing      Dennis Soares 

 

Upcoming news:  November Position Report - Tuesday December 12

Further Info:  October 2017 Position Report

Almond Review - October 2017

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

September shipments were 190.6 million lbs. vs. 201.6 million lbs. in 2016 - down 5.4%

DEMAND

U.S. shipments: -13.3% (+0.6% YTD)

Exports: -2.2% (-5.2% YTD)

Late pollinator receipts held September shipments from reaching their potential.  

CURRENCY:  The USD strengthened after the Fed announcements September 20, signaling future increased interest rates.  The USD is at 1.18 to the Euro. 

2017 CROP

Receipts YTD as of September 30 were 844.2 million lbs. vs. 960.6 million YTD 2016.  They continue to trail last season due to the late harvest and slow hulling season.

Insect damage so far is 2.35% vs. 1.24% a year ago.  This along with the high volume of doubles is reducing the availability of high quality grades and increasing supply of lower spec material.  

NASS seems correct in their assessment of a good Nonpareil crop and inconsistent pollinator crop.  We see a high degree of variability in pollinator yields (from field to field) and the following averages (preliminary and localized):  Monterey +5%, Wood Colony +14%, Butte -9%, Fritz -4%

Bud development for 2018

Bud development for 2018

OUTLOOK:

During September, handlers were limited in what to sell due to the late crop and challenging quality.  The heavy commitment figures with the prior report, along with concerns about 2017 yields, also kept some from selling.  Despite only moderate activity taking place (235 million lbs. or 9% of total supply), pricing moved up due to a lack of offers.  Shipped/Committed reached 1.08 billion lbs. or 41.5% of total supply - similar to a year ago.  

As more sellers returned to the market in October, activity has been low.  In any case, many handlers are fully committed for October from earlier sales.  Due to the supply challenges mentioned and more prolonged buying for a later Chinese new year, we will need at least 2 if not 3 more shipment reports to gauge demand / real consumption, though most buyers report it's quite healthy.  

Best wishes,

Paul Ewing      Dennis Soares 

 

Upcoming news:  October Position Report - Friday November 10 (Updated from Nov 9)

Further Info: September 2017 Position Report

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