Today the Almond Board of California released the March 2016 position report.
March shipments were 161 million lbs. vs. 190 million lbs. last season - down 15%
The 161 figure was in-line with expectations. March 2015 was over-inflated with exports that were delayed into March due to earlier port congestion.
We experienced stable pricing for about 6 weeks. Demand was steady during March 2016 with strong sales of 165 million lbs. vs. 129 in February 2016 and 94 million in March 2015.
Shipment re-cap for major markets:
Month Crop year
U.S.A. -26% -9%
W. Europe -4% +6%
Middle East -10% -23%
India -22% -12%
China/HK -13% -7%
Japan -33% -3%
THE 2016 CROP
The crop potential looked excellent in late February, uncertain in March, and is looking much better in April. The improved winter chill hours and deep moisture are having a good impact on the trees for this season and beyond. These factors along with the cooler spring weather are helping put more new growth than we saw the past few seasons.
Kernel sizing seems larger, as the cool weather helped with this as well.
In recent years, demand has been held stable with high prices due to tight supply. The headache of the '15 crop may have clouded our minds and many cannot seem to recall a time when demand has grown by much more than 10%. We repeatedly hear this so thought we would review what happened after the high priced season of 2005:
2006 crop year: Supply up 16.9%, Shipments up 16.6%, Pricing averages ABOVE today's levels. Nonpareil 23/25 traded in the 2.55 to 2.90 range. Cal 27/30 in the 2.00 to 2.50 range.
2007 crop year: Supply up 19.6%, Shipments up 18.3%, SIMILAR pricing (higher NP, lower Cal), with NPS 23/25 in the 2.45 to 2.75/lb. range, Cal 27/30 in the 1.75 to 2.15/lb. range.
Some point out that we were dealing with half the volume then, however, with the tonnage growth, the industry has also grown the consumer's appreciation & awareness of almonds, so we believe percentages are still relevant.
For Jan-Mar 2016 vs. 2015, shipments are up 5%. With the heavy March sales and current low prices, we expect a larger increase for April-July. However, using a continued 5% increase, expected carry-in is 480 million lbs.
Potential supply scenarios for the 2016 crop year:
2.0 billion lbs. crop, Supply up 9.6%
2.1 billion lbs. crop, Supply up 14%
2.2 billion lbs. crop, Supply up 18.4%
With supply scenarios like the above, commitments up 21% vs. a year ago, and current prices, we expect a firm and active market. However, with the uncertainty of the world economy and strong USD, some qualms about the market direction may remain. Also, important to note that we will not see the objective estimate for another 2.5 months
Exciting times ahead with back to back reports in May...
NASS' Subjective Crop Estimate - Tuesday May 10
April Position Report - Wednesday May 11