Almond Review - Jan 2016

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

December shipments were 135 million lbs. vs. 148 million lbs. last season - down 8.6%

DEMAND showed a few spurts in December but has been quiet overall, especially over the past week.

We experienced 3 points in time this season, once during each month Oct/Nov/Dec, where the market seemed to hit bottom and start firming, only to fall again to new lows.  

Below is a shipment re-cap for major markets:

                                  Month   Crop year

U.S.A.                          -11%               -6.4%

W. Europe                   +2%                 -7%

Middle East                 -21%                -37%

India                            +2%                 -1%

China/HK                   +18%                -12%

Japan                            -8%                  +4%

THE 2015 CROP:
Crop receipts as of December 31 were 1.85 billion lbs., up from 1.75 billion lbs. last month.  We still attribute this to the heavy crop in the north and the young acreage state-wide.  

 

OUTLOOK:

Committed unshipped was 417 million lbs., up 10.6% vs. a year ago.  January is likely to be up in the range of 10%+ vs. Jan 2015.

Many factors played into the perfect storm this season, which is always clearer looking back: higher starting prices, the strong USD, weak economies in China and other countries, commodity defaults in Dubai, lower competing nut prices, improved weather conditions, and more recently, the higher-than-expected crop receipts.  The drought is not over and there is still little likelihood of the Federal districts getting much if any allocation, but the water supply, particularly the snow pack, is looking much better than it was a year ago, when almond pricing was $1.30/lb. higher.  

Chilling hours are up significantly which gives the trees good rest going into the 2016 crop.  This also makes it more likely to have a stronger and more condensed bloom, which is good for variety overlap but could make the crop more susceptible to rainy conditions.  Buyers will understandably be skeptical of crop concerns even with a rainy bloom, but a lack of sellers at that time could bring firmness back to the market if not seen beforehand.  A change in momentum and increased confidence is needed to bring more buyers back and see more normal market activity levels resume.

Posted here is a Water Supply Update

Posted here is the December 2015 Position Report

The January Position Report is due for release Thursday February 11

Best regards,

Paul Ewing      Dennis Soares

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