Overall, this report points to some great positives for our industry in that:
a) Crop receipts are likely to settle at 2.55 or lower
b) Shipments are trending 5% higher
c) Sales are 28% higher and commitments are 17% higher
d) Basis the commitments we should continue to see record shipments in the coming months, which is important to ensure a manageable carryout
Under normal circumstances we would expect the market to rise by about 5 cents after such a report, however, the current conditions across the globe are anything but normal.
With more countries reporting cases of COVID-19 and drastic measures being implemented by governments with regard to travel and free flow of goods, there is a lot of uncertainty in markets across the globe. As a result, buyers in these destinations are wary of layering on additional coverage even though they believe these are attractive levels.
One exception is the US Domestic market where consumption is retail-led and ingredient-focused, and hence buyers have confidence and are layering on additional coverage. In an ideal world, we should see similar activity from Europe but given the paranoia in Europe with regard to the pandemic, we haven’t seen this materialize.
Considering the fact that COVID-19 concerns will counterbalance the strong position report, we expect the market to remain fairly stable as far as the 2019 crop is concerned.
Bloom has now wrapped up across the valley and while we have had good bloom weather, the lack of rainfall and poor snowpack could be a point of concern for growers through summer. We will soon start receiving unofficial estimates on the potential of the 2020 crop. As we have learned over the last few years these estimates are merely indications of possible scenarios and given the huge acreage under almond production all it takes is a small variance in yield to make a huge impact on the overall crop. For now, it appears that current price levels are based on a 2020 crop expectation ranging between 2.70 - 2.80 billion lbs.