Almond Review - Nov 2015

Today the Almond Board of California released the October 2015 position report.

October shipments were 162 million lbs. vs. 204 million lbs. last season.

Domestic and export shipments were both off over 20%

DEMAND has been quiet except for a spurt in late Sept / early October.  Below is a look at some key markets for the month and for the crop year:

                                  Month           Crop year

U.S.A.                        -21.4%               -5.3%

W. Europe                   -13%                 -10%

Middle East                 -53%                 -47%

India                            +12%                -10%

China/HK                   -15%                 -26%

Japan                            -9%                   +11%

There is still turmoil in Dubai due to the financial issues with traders there, and a glut of inventory that needs to be re-sold.  Some expect it to be worked through by the end of the year.  China, while off, was off less than the previous months and that trend may continue.  India improved as well.  

THE 2015 CROP:
Crop receipts as of October 31 were 1.45 billion lbs., up from 922 million lbs. last month.  We were trailing last year's receipts by 17 million lbs. and are now trailing by 67 million lbs.    



Crop receipts would need to match last season for Nov - July (351 million lbs.) to reach NASS' estimate of 1.8 billion lbs. and this seems very unlikely since receipts are slowing down and many shellers are wrapping up earlier than last season.  If the trend continues each month with fewer receipts vs. last year, we still could see a crop in the low 1.70's.  We will know sooner this season as most will be in by next month's report and certainly by January.  

Committed unshipped was 445 million lbs., down 2.8% vs. a year ago, whereas last month we were up by 14%.  This demonstrates the lack of activity in October.   Many buyers have been postponing purchasing decisions due to market uncertainty, and this has caused further market softening and lower shipments & commitments.  

This season, aside from the serious water situation, now seems reminiscent of 2005.  We had a light crop, record high opening prices, record plantings, and demand caused a big market correction.  We did see a market firming and major bump in prices later in the '05 crop year as prices had over-corrected downward.  When we received the Oct '05 position report 10 years ago, shipments for the U.S. were off 10% and exports were off 24%.  At one point U.S. shipments were off 13%.   By the end of the crop year in July 2006, domestic shipments were only off 8% and exports were only off 6%.  The point is that while we believe some decline in demand is real, part of the decline in shipments is due to lack of price stability and weak market sentiment.  At that time nut prices were lower and it does seem the highs are higher and the lows should be higher too.  Most of the buying side of the industry did not even see this correction coming and it reminds us all how unpredictable these nut markets can be.

Shipments should improve when enough sellers approach the market more patiently and thus buyer's confidence picks up.   The outlook for '16 crop potential should also have a big impact on pricing later in this season.  

Posted here is a Water Supply Update

Posted here is the October 2015 Position Report

The November Position Report is due for release Tuesday December 8

Please feel free to contact us with any questions or feedback.

Paul Ewing      Dennis Soares