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Almond Market Update - July 7, 2023

The California summer we were expecting finally arrived last week, with temperatures reaching 115 degrees across most of the growing region. While it did stick around for a couple of days, temperatures have calmed down a bit and should continue in the mid-90s before climbing back up once again next week. As we enter the final days of the growing season, this will solidify the nuts in their shells as growers prepare for harvest over the next 30 days or so, depending on the region.

Next week, the Almond Board of CA will release the "June Position Report", and the USDA will release the "Objective Estimate" the following day. Most buyers and sellers, for that matter, are waiting for these two critical reports before making a decision to book their future needs. As a result, along with the Fourth of July holiday, business has been generally slow. Expectations are that business will pick up next week and in the weeks following.

As a recap, crop receipts this year should amount to 2.57 billion pounds, down 11.8% from last year's crop of 2.910 billion. The industry is currently on par with last year, with 2.191 billion pounds shipped year-to-date. With any luck, the industry will ship close to the same 2.634 billion pounds as last year. This would put the expected carry-out this year at around 750 million pounds (or lower if we can have a strong finish to the crop year). A preferred carry-out would be sub-500 million pounds. Market conditions have remained aggressive up to this point as a result. If the "Objective Estimate" comes in below the Subjective Estimate of 2.50 billion pounds, expect to see prices firming up for the new crop and perhaps a little more pressure on the remaining crop as well. However, anything above the Subjective Estimate would suggest pricing to remain flat unless there is a significant improvement in overall demand.

Upcoming Industry Milestones:

  • Growing Period: Orchards continue to look good as there has been plenty of water for irrigation during this heatwave. 
  • Position Report: July 11, 2023
  • Objective Estimate: Revised to July 12, 2023 - 9AM PST

Almond Market Insights - Week 27 Update:

Bullish Trends:

  1. Market conditions remain advantageous for buyers of the current crop. Finding offers for the new crop beyond December without a premium remains difficult.

  2. Shipping issues have improved drastically, with rates returning to pre-pandemic levels.

  3. California will continue to focus on moving the current crop, understanding that the new crop will be late and may be lighter than last year's.

Bearish Trends:

  1. Sales have been slow as buyers are in no hurry, with plenty of available stock on hand. Buyers are requesting shipping positions further out, while sellers are asking for prompt shipments. Next week will provide more clarity.

  2. The delay in the "Objective Estimate" has upset many growers and will only slow down the process of selling the new crop.

  3. With the industry falling behind in new crop sales, the next few weeks will be critical to make up for this shortfall. This is crucial because production will need to match the new crop demand once it becomes available.

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