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Almond Market Update - June 5, 2023

California continues to experience lower-than-normal temperatures for this time of year. Perhaps we have become too accustomed to the years of drought, as temperatures remain in the low 50s in the early mornings and mid-70s in the northern valley, while the south valley reaches the mid-80s. The extended 10-day forecast predicts more of the same. Currently, it is expected that this year's crop will be delayed due to the extended bloom period, combined with these persistently cooler temperatures. Depending on the region, this may push the harvest back by a week or two.

The International Nut Conference (INC) took place in London from May 22nd - 24th. Growing sentiment suggests a possible delay in global demand for most tree nuts. Although believed to be temporary, this has impacted market levels. Coupled with slowing shipment numbers, prices have weakened. Total shipments for April were 197.26 million pounds, falling below expectations and showing a significant difference from last year's 245.24 million pounds (a decrease of 19.57%). Suddenly, the market feels a bit behind again. Additionally, domestic shipments continue to show weakness, with 56.8 million pounds shipped in April, a 9.0% decrease compared to the previous year. The total domestic shipments to date amount was 544 million pounds, a 6.10% decrease from last year. Export shipments also displayed weakness in April, with 140.4 million pounds shipped, a decline of 23.2% compared to the previous year when the industry set an all-time record for April shipments at 182.8 million pounds.

The focus will be on the May shipment numbers, which will be released this week. Most people in the industry believe that these numbers will also be trending downwards since new sales for the months of March and April were both down. Consequently, it is expected that we will continue to see low shipment numbers for both May and June.

The Subjective Estimate for the new crop year 2023/24 is projected to be 2.5 billion pounds, which would be 3% less than last year's production. The industry had hoped for a smaller, more manageable crop size to align supply with current global demand. In about a month, the Objective Estimate may provide additional insights.

Upcoming Industry Milestones:

  • Growing Period: The crop is well-established and looking very healthy on the trees throughout most areas.
  • Position Report: June 9, 2023
  • Objective Estimate: July 7, 2023

Almond Market Insights - Week 22 Update:

Bullish Trends:

  1. Market levels are generating more interest this week than in previous weeks. Buyers sense an opportunity to fulfill their remaining needs from the current crop.

  2. Pricing has firmed up for certain sizes and varieties, such as most Nonpareil sizes and especially higher grades, due to tighter positions.

  3. California remains determined to sell out of the current crop before making a more significant attempt to sell the new crop, particularly for the fourth quarter rather than later in 2024.

Bearish Trends:

  1. Due to poor bloom weather, the industry stopped selling for almost two months. The orchards have proven to be very resilient despite what most would agree was a tough winter for California farmers.

  2. Currently, uncommitted inventories have surpassed last year's levels, totaling 788.75 million pounds compared to last year's 771.47 million pounds. The industry may have reintroduced a larger carryout than desired or necessary.

  3. With overall global demand experiencing a lull, it is questionable how much influence can be exerted at any price. Shipments remain challenging as domestic and global consumption weakens.

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