Almond Market Review – December 2018

The Almond Board of California released the November position report

Shipments were 237.6 million lbs. vs. 228.5 million lbs. in 2017 – a new record

DEMAND…

…strong lately, with steady interest for prompt meanwhile many packers already have their plant capacity full for nearby shipments (for kernels at least).  Very low expectations were in place for China and the Middle East this season, and both region showed very strong November shipments.  The Middle East continues to buy heavily during December.  India’s light month is potentially a sign of a good activity ahead in the coming weeks.  If today’s report gives Europe more confidence, they may refill the pipelines further like several other markets have.  

U.S. up 5.1%

Exports up 3.6%

Western Europe -6% (-6% YTD)             China/HK/Vietnam +45% (+2% YTD)               India -38% (-8% YTD)

Middle East / Africa +14% (-25% YTD)        Japan +18% (+2% YTD)                Canada +9% (+12% YTD)

South Korea -11% (+11% YTD)            Central/Eastern Europe -7% (-11% YTD)

2018 CROP           

Crop receipts point toward a crop in the 2.25 to 2.3 billion lbs. range.  Today’s report seems to lower industry expectations by about 50 million lbs. as receipts suddenly fell behind vs. last year.  1.987 billion lbs. vs. 1.993 a year ago.  We had a late start and seem to have an early finish.  The crop seems to be falling far short of NASS’s 2.45 billion lb. objective estimate and more in-line with the grower’s 2.30 billion lb. subjective estimate.

REVIEW:

November sales of 239.7 million lbs. are up from 212 million lbs. a year ago.  The strong October position report encouraged buying activity.

Committed/Shipped are nearly 1.4 Billion lbs., approximately 53% of total supply or 62% of the projected marketable crop, assuming a crop of 2.3 billion lbs.

December shipments seem on track to set another record.

With the chances of a “long tail” on the ’18 crop extremely unlikely following today’s receipt figures, the market should remain firm in the near term.  Buyers needing anything shipped in the next 30-45 days should consider coverage sooner than later as processing capacity is tight.  At some point, there may be a tug of war between the potential of a larger ’19 crop and the likely tight supply on remaining 2018 crop.

Happy Holidays,

Paul Ewing    Dennis Soares

Further info: November 2018 Position Report

Upcoming news:   December Position Report – January 11, 2019