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

Almond Review - June 2017

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

May shipments were 170.7 million lbs. vs. 178.1 million lbs. in 2016 - down 4%

DEMAND

U.S. shipments are up 13% YTD and up 10% for May

Exports, up 21% YTD, were off 10% for the month.  The decline is once again from China and India, which is largely due to a lack of in-shell supply left in California.

Commitments of 384 million lbs. are up 6% vs. a year ago.  With 1.77 billion shipped, the industry has sold or shipped 2.153 billion lbs.; which is 86% of total supply.

2017 CROP

The crop is progressing nicely with continued cool weather.  Insect and disease pressure has been minimal.  Sizing seems larger than the 2016 crop.  Crop development continues on track for a later harvest than 2016.

OUTLOOK:

Pricing in recent weeks has been quite stable.  

Today's shipment report seems to be at the high end of expectations.   

Most anticipate 2017 crop volume to surpass the subjective estimate of 2.20 billion lbs.  With new crop trading near current crop parity, and well below 2016 crop averages for pollinators, it seems the market is trading on an expected crop above 2.2 billion lbs.

For the first time, we have new crop commitment figures so early in the year. The industry has sold roughly 10% of the 2017 crop.  The domestic market, on track to ship about 667 million lbs. for 2016 crop, has already purchased 94 million lbs. of 2017 crop.  Export markets have purchased 115 million lbs.

May sales of current crop were 145 million lbs., up from 107 in May 2016.  With uncommited inventory down 6% vs. a year ago, and the anticipated late harvest, the short-term outlook for current crop, particularly certain sizes and qualities, looks very firm.  One unknown is what impact a tight current crop may have on new crop pricing, although many buyers have been awaiting the 2017 crop objective estimate before contracting significant volume of new crop. 

Upcoming dates:

Objective Crop Estimate - July 6

June Position Report - July 11

Best regards,

Paul Ewing      Dennis Soares

 

Further Info:

May 2017 Position Report