Overall, this report goes to show that global demand for almonds continues to grow and despite shipping woes, the industry has been able to get product shipped.
Given the commitments on the books and shipment trajectory it would be safe to say that we should continue to see record shipments in the last two months of the season, which should help bring this carryout closer to a 610 million lb. level.
Focus will now shift to the 2021 crop. With higher temperatures in the valley, the impact of drought both in terms of water costs as well as yields is the topic of every conversation.
The subjective estimate at 3.2 billion lbs. has not found much support in California. What the actual crop ends up being may be immaterial now as the overwhelming sentiment is that given cost of production, prices need to be at levels that are far more sustainable. And while California might be sitting at a less sold position currently, the flip side is that buyers don’t have coverage either. This is specifically true in the case of the domestic market where current crop commitments are flat to last year while new crop coverage is 23% down. It is only a matter of time until domestic buyers jump in and try to lock in volume before prices rise further.
New crop has been trading at about a 5 - 7 cent premium to current crop and since the release of the position report we have seen the overall market firm up by about 5 cents. It might be a few days before the market settles but it does appear that we could see increased trading activity in the coming weeks.