Almond Market Update – September 2019
The Almond Board of California released the August position report
Shipments were 147.7 million lbs. vs. 154.2 million lbs. in 2018 – a decrease of 4.2%
U.S. down 6.9%
Exports down 2.2%
Western Europe +13%
China/Hong Kong -36%
Middle East / Africa +23%
The Billion dollar question is where this crop ends up as the difference between a 2.20 like the objective and the 2.50 subjective is very significant on where prices end up. However, many think we are already trading with levels based on a crop of about 2.40 billion lbs. as many believe 2.40 B to be the “general consensus.”
What we know so far: The far south and west sides of the valley are seeing excellent yields, perhaps not record breaking, but significantly up from last year. The East sides of Merced, Stanislaus and San Joaquin Counties are not as far along with harvest, but reports are significantly worse in that region, generally ranging from slightly down to significantly down. We are unsure about the pollinators, especially in those 3 late harvesting counties, and an acreage boost should help there as well. The North has mixed reports depending on what area of the north, but acreage growth will provide some disproportionate boost to the region.
Crop Receipts reached 200 million lbs., up 11 million from a year ago, essentially all coming from the Independence variety. Harvest started later but is running smoother, so we cannot interpret much from these receipt figures.
Shaking is going very well. The nuts are coming off easier than last year, which is a minute help for crop receipts and a positive for insect pressure for the 2020 crop.
Insect Damage is running at moderately high levels but below last year. NP average damage so far is 1.49 vs. 1.76 a year ago.
Kernel Size for us is slightly smaller than last year. Nonpareil size 27/30 seems to be the most common size in our area.
August shipments were down slightly but in-line with expectations.
The U.S. market, which grew but just under 1% last year, was down 7% for the month and show sales down 3%. Even without the help of Pro Soccer player Julie Ertz (see more on that below), the U.S. is not growing as it was. We are interested to learn more about what’s happening domestically so please share if you have any insights.
New (2019) crop sales reached 561 million lbs., up 9% from a year ago. Export sales led the way, up 18%.
The USD strengthened further against numerous currencies recently. The Euro is as 1.10 USD. The exchange with emerging market currencies is generally even less favorable. The Trade Wars are not helping either.
Empty pipelines – there is a lot of buying that seems to need to take place for nearby shipments as inventory around the world seems low. The other bullish factor is that prices have already come down significantly off the highs of mid-July and are back near pre-objective estimate levels. This means there is more seller resistance, especially in areas with weaker crops as that also plays into the seller psychology. The price drop also provides more reasonable prices to buyers as they re-fill the pipelines.
Feel free to call or email for further discussions.
Paul Ewing Dennis Soares
Further info: August 2019 Position Report
Upcoming news: September Position Report – October 10