Almond Review - November 2016

Today the Almond Board of California released the October 2016 position report

October shipments were 235 million lbs. vs. 163 million lbs. in 2015 - UP 45%

DEMAND

October sales were 183 million lbs. - a mediocre figure which is approximately 9% of the crop. 

Total shipped & committed almost reached 1.194 billion lbs. - approximately 60% of the projected marketable crop and nearly 50% of total supply (crop + carry-in).

USA (+19%, +14% YTD) continues to improve.  Pasteurization facilities are booked up way in advance, indicating the strong trend is continuing into November.

China (+128%+89% YTD) is reacting well to lower prices. 

India (+17%, +64% YTD) took a slight breather following the big start.  We hear local Diwali sales were excellent and consumption is benefiting from high cashew pricing ($4.80/lb. range). 

The Middle East (+152%, +135% YTD) continued to refill the barren pipelines.  

Western Europe (+14%, +18% YTD).  New sales slowed to the region as traders aggressively re-sold from their positions.  Forward coverage in Europe is unclear.

THE 2016 CROP

Receipts reached 1.559 billion lbs. - up 7.6% vs. a year ago.   This is on the low end of expectations, pointing toward a crop similar to NASS' 2.05 forecast, though after last season, most will be cautious as to what kind of "tail" is on the end of receipts.  Expectations seem to be in the 2.05 to 2.10 billion lb. range.  

Hulling & Shelling capacity has increased greatly in recent years so we hope to have a good window into the size of the crop with the following position report.  

NASS' Nursery Survey

Results showed at least 14.5 million almond trees were sold from June 2015 to May 2016.  The actual figure is higher as only 9 out of 10 nurseries participated.  The estimated increase (from the 9 nurseries) is 77,000+ acres of new plantings and 27,000+ acres planted to replace existing orchards.  New plantings are up 7% from the prior year.  Replacement plantings are up 50% as many growers are removing old orchards due to the drought and lower almond prices.  

OUTLOOK:

In anticipation of a perceived "big crop" buyers world-wide postponed purchases during the summer, which brought a large wave of buying this fall.  The market has been quieter in recent weeks as buyers retreated after more sellers returned.  Following a few quiet weeks, and today's bullish report, we may see another wave of activity.

NASS Nursery Survey

Water Supply Update

Farmers Slam State Plan for Water Control

October 2016 Position Report

Next position report:  Wednesday December 7, 2016

Best regards,

Paul Ewing      Dennis Soares