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The Almond Board of California released the March position report last week.  Key highlights were as follows:

Receipts

When January receipts were reported at 123 million lbs., it raised concerns on the possibility of the 2019 crop approaching 2.60 billion lbs. With receipts of just 21 million additional lbs. in February, those concerns may be a thing of the past. Season total now stands at 2.53 billion lbs., up 12% from last season. Given the huge slowdown in February, final crop receipts are likely to settle between 2.54 and 2.55 billion lbs.

Shipments

With 201 million lbs. shipped in February, this is the third consecutive month that we have seen a new record in shipments and exceeded even the most optimistic of industry estimates. At 64 million lbs., domestic shipments were up 10% from 58 million lbs. shipped last February. This can in part be attributed to the fact that fear of COVID-19 has led to consumers resorting to stockpiling and in turn retailers needing to call on additional volumes.

In spite of the fact that most export destinations were down in February, California managed to export a record of 137 million lbs. this month, up 7% over last February. This was due to the stellar imports by India of 22.78 million lbs., up 63% from last February’s 13.96 million lbs. While the Indian demand seems phenomenal it is important to note that California is merely filling a vacuum created due to Australian in shells being sold to China instead of India.

Year-to-date shipments now stand at a record 1.473 billion lbs., up 5% over last season. While the domestic shipments were slightly down for the first half of the season, they are now trending up and year-to-date domestic shipments stand at 433 million lbs., up 1.52% over last season. Given the increase in new product innovations, especially on the ingredient side, as well as the increase in demand on account of stockpiling, we estimate the domestic market to grow between 3 and 5% this season. Year-to-date export shipments now stand at a record 1.04 billion lbs., up 6.46% over last season. With the exception of China, all other regions have shown good growth so far this season.

Sales & Commitments

The lower price levels in the second half of February were able to generate a lot of buying interest, with a record 191 million lbs. sold in what is otherwise considered a slow sales month. Also worth mentioning is that the increase in sales was driven by both the domestic as well as export markets.

As a result of the strong sales, commitments now stand at 589 million lbs., up 17% over last year.

Basis our strong commitments mentioned above, one can conclude that March will be another month of strong shipments.

Assuming a 2.54 billion crop, the industry has sold nearly 74% of total supply which is in line with historical levels for this time of the year.

In a Nutshell...

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.

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