Almond Market Review – January 2018
Today the Almond Board of California released the December 2017 position report
December shipments were 204.6 million lbs. vs. 156.2 million lbs. in 2016 – up 31%
U.S. shipments: +7.7% (+6% YTD)
Exports: +41.6% (+10.5% YTD)
The U.S. shows continued steady growth. With domestic commitments up 11% vs. a year ago, there’s no sign of this changing. The same goes for Europe, where there’s been good buying activity recently.
India, up 38% YTD, took 20 million lbs. of inshell vs. 5.6 million lbs. last December. They may be out of the market for a while.
China (including HK/Vietnam) figures demonstrated they were just having a late start due to the late Chinese New Year. With a 539% increase over last December, the region went from down 13% YTD to now up 4%.
Turkey’s government recently made a huge reduction in import duties. We are seeing a big increase in activity there and expect to see this reflected in the coming reports. Turkey shipments were 53 million lbs. from California last season, and are down 4% YTD
Receipts YTD reached 2.207 billion lbs. vs. 2.062 billion YTD 2016, up 7%. End December receipts have a narrow 4 year history range of 96.3 – 97.7% of final receipts. Using last year’s 96.5%, receipts would reach 2.287 billion lbs.
The bud set looks excellent.
Water: The lack of rain is concerning. Snow pack remains very low, showing 3% of normal at Echo Summit on January 3. The reservoir levels are good and there’s still plenty of winter left, so this is a bigger concern for 2019 crop year than 2018.
Chill hours, especially dynamic chill hours, are low. This is a concern as we saw the impact this seemed to have on crop yields during the recent drought years.
Bearing acres will obviously give a good boost to the 2018 supply.
REVIEW & OUTLOOK:
Sales during December were 166 million lbs. – strong considering the time of year
Shipped/Committed reached 1.66 billion lbs. (up 212 million lbs.) This is 63% of total supply (using a 2.287 billion lb. crop) or 72.6% of saleable supply. This puts most sellers in a comfortable sold position.
We mentioned a few months back that we needed to see several reports to gather a better idea of the trend, especially due to the challenging and late start. With 5 months underway, shipments are up 9%. Supply is projected up 5%.
Today’s shipments were well above the already high expectations and strong commitments / demand levels point toward another good month. The strong crop receipts will likely change expectations some had that we may not make the 2.25 estimate. While receipts were heavy, the very impressive ship figures should outweigh the receipt news and continue the firm market conditions for the short-term, at least until attention turns to bloom. The industry is on track to decrease the carry-out, and we believe how much this impacts 2017 crop pricing will partly depend on the 2018 supply outlook.
Please feel free to send any feedback or questions you have.
Upcoming news: January Position Report – Friday February 9, 2018