Almond Market Review – June 2018
The Almond Board of California released the May 2018 position report
May shipments were 158.3 million lbs. vs. 170.7 million lbs. in 2017 – down 7.3%
This was the first “down month” since September.
The U.S. market remains very solid, up 13% for the month.
Exports were off 18% or 20 million lbs. Western Europe and the Middle East/North Africa were both off about 10 million lbs. For the past few weeks, we have seen steady interest out of the Middle East/ North African region, so shipments could pick up on upcoming reports. However, it is uncertain the entire region will pick up given the duty/import situation in Turkey.
REVIEW & OUTLOOK:
Shipped/Committed reached 2.24 billion lbs. (up 89 million lbs. from a year ago). This is 86% of total supply or 101% of the saleable 2017 crop.
New crop commitments have felt like the lowest in a long time, and today’s report verified this, showing 81 million lbs. of new crop sold, vs. 209 a year ago.
The trade war talk and actions likely have contributed to lower exports (-18%) and export commitments (-36%). The stronger USD (albeit slight vs. most currencies), has also contributed to delayed purchases. Another reason, and likely larger cause of lower export shipments and commitments, is the higher pricing during May, particularly pollinators, causing some buyers to take a breather in hope of lower prices.
May sales were only 76 million lbs. vs. 145 million lbs. last May. Following the slow month, there could be a lot of pent up demand that needs to surface again.
The short-term pricing will depend on how much buying activity takes place soon and how much is postponed until after the objective estimate in 3.5 weeks. Given the more reasonable pricing and apparent pent up demand, it appears more likely this buying will take place soon, but there is still a cloud of doubt from the all the trade uncertainty. Buyers needing very specific sizes and qualities, particularly on pollinators, should seriously consider covering sooner than later, just to secure supply.
Paul Ewing Dennis Soares
Further info: May Position Report
Upcoming news: NASS Objective Estimate – July 5 June Position Report – July 12