Almond Market Update - June 16, 2023

By: Richard Andonian

Perhaps the biggest news of the week is the USDA's decision to push out the announcement of the Objective Estimate to July 12th. No explanation was given, only speculation that it was delayed to better align with the crop progression. We have previously shared that the crop could be a few weeks late this year due to California weather. This causing a delay in the report is not logical. Having said that, it does better align with the position report that will be released the day before, giving the industry plenty of data in a two-day span to work with. With these two reports coming, one cannot wait to re-engage with buyers as we continue to move the current crop and jump-start selling the new crop.

Just as the Objective Estimate has been delayed, so has the summer heat in California. This week remained below normal, and it has been an exceptionally mild start to our summer. We will see a little bump up to the low 90s over the weekend, but then it settles back down to the low to mid-80s for the week following.

With the Almond Board having released the May position report last Friday, crop receipts are all but done, with 2.566 billion pounds received, down 11.8%, and should finish at 2.57 billion, compared to last year's crop of 2.910 billion. Unfortunately, with the weather being what it was through the bloom, many growers chose not to sell with concern about a possible crop failure. Now the industry finds itself feeling behind from where it would like to be at this point; however, in reality, the industry is flat to last year at the same time, with 2.191 billion pounds shipped year-to-date. Nevertheless, it would be a good thing to finish ahead since last year we carried out an unprecedented 837 million pounds. While we will bring that down a little this year to around 750 million pounds (or lower if we can have a good close to the crop year). Certainly, something we should all subscribe to as we must start to consider the next crop year, which has the potential of bringing back a +3.0 billion pounds a year from now. Not to get ahead of ourselves, but necessary forward thinking is appropriate.

We will have to be patient now. If the Subjective Estimate for the new crop year 2023/2024, which is projected to be 2.5 billion pounds (2.45 billion after loss and exempt), holds true, it would result in a total supply of 3.2 billion pounds for the next crop year. However, there is plenty of speculation that this crop may be significantly smaller. Time will tell.

• Growing Period: The cool weather has helped remove stress from the trees and things continue to progress nicely.  
• Position Report: July 11, 2023
• Objective Estimate: Revised to July 12, 2023 - 9AM PST

Bullish Trends:

1. Market levels continue to create more buying interest this week as buyers move to fulfill their immediate short-term needs.

2. While the industry has plenty of almonds to sell, certain varieties and sizes may be harder to find as we close in on the end of the crop year.

3. California is determined to sell out of the current crop before making a more significant attempt to sell the new crop. This will play well considering the lateness of the new crop.

Bearish Trends:

1. Even with the advantageous price levels, demand seems to be questionable. Buys are asking for further positions, while sellers are asking from prompt shipments.  This has caused perhaps another weak shipment month for the industry in June.

2. Delaying the objective estimate will only push further back the opportunity to sell both the current crop and the new crop as buyers sit on the sidelines waiting to hear the news before making any buying decisions.

3. The mismatch of customer demand timing and processor stocks to ship prompt may push out past the close of the 2022/2023 crop year and create backlog into the new crop 2023/2024 crop year.

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