Almond Market Update - April 28, 2023

By: Richard Andonian

California received its first wave of summer heat this week with temperatures reaching into the 90’s. It looks like it is only sticking around for a couple of days before temperatures will drop below normal again by Sunday with rain expected next week.   

Last week, an industry analyst reported a crop estimate of 2.66 billion pounds, based on a 1.36 million bearing acres. This week an opposing view from another company estimates 2.29 billion pounds based on 1,650 pounds per acre and 1.39 million bearing acres. Yesterday, LAND IQ in cooperation with the Almond Board of California, released their acreage report stating 1.366 million acres of bearing land. Additionally, the USDA delivered their acreage report estimating 1.38 million bearing acres. Each have their own methodologies for arriving at their numbers. If we use a crop yield of 1,650 pounds per acre we would be in the area of sub 2.3 billion pounds regardless of who is right on the bearing acreage. You have to go back 5 years to find a crop of this size and back to 2005 to find a yield this low.   

With March shipments setting a record for March at 281 million pounds, this also marks the third month in a row of record shipments. With growing concern for the crop on the tree’s, many sellers have decided to sit on the sidelines. Most will wait until at least the subjective estimate comes out in two weeks on May 12th. A more definitive understanding of crop size and kernel sizes may need to be better understood before sellers begin selling any new crop. Additionally, if the crop is off as much as is being indicated, then holding on to the current supply may become more advantageous as prices continue to firm. 

The industry has now shipped 1.798 billion pounds year to date, +6.85% ahead of last year at this time. Couple this with crop receipts currently at 2.541billion pounds to date (off -12.4% to a year ago), we can see supply becoming more aligned with overall demand for almonds.  

The market has started to wake up a bit, but with grower sentiment being what it is, there has not been a lot of trading. Once more data continues to be compiled and buyers understand the reality of the situation, business should start to get done. 

• Growing Period: We had a heat spell this week and saw the first of irrigation this crop year! Next week, cooler weather may prevail.     
• Position Report: May 11, 2023 
• Subjective Estimate: May 12, 2023
• Position Report: June 9, 2023

Bullish Trends

1. Shipments are ahead of the same time last year. With a smaller crop possibly coming, growers can expect more for every pound of current crop left to sell. 

2. Total supply this year is less than last year. With a likely further decline in total supply next year, demand will possibly exceed supply. 

3. The acreage reports released, lend credence of bearing acreage flattening out.  

Bearish Trends

1. With sales being down for the last two months, expect to see shipments for April fall off from the record shipments the last three months, which may bleed into May as well at this rate.   

2. With prices having run up as fast as they have with no significant trading taking place, it may turn out to be too much too soon. 

3. Future demand still remains in question, especially from a domestic standpoint.   

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