Almond Market Update - January 20, 2022

California weather remains a mystery. Despite a great December weather-wise, there were high hopes for continued rain and snow in January. Unfortunately, hope is not something we can plan on, as the extended forecast for the next ten days does not include either rain or snow. It appears we received our highly-anticipated January weather a month early.  At the end of December, the snowpack was at 160% to normal; three weeks later it has dropped to 115%, which is still good, however we will continue to see this number drop. Just for perspective, if we were to project no more snow this season, the current snowpack would represent 60% to normal by April 1. 

Following last Tuesday’s release of the ABC position report, we saw some market weakening.  As a reminder, shipments for December were just under 189 million pounds — 26.5% below last year’s record 256.9 million pounds. This put the industry -17.3% behind last year in shipments year-to-date with 1,061.79 billion pounds shipped.  Fast forward to this week, where we see the market starting to wake-up following a slow start to the year, with business being down throughout the EU, MD and India markets. This has helped buyers to regain their confidence as pricing stabilizes for now, appearing to have found the bottom.

While focus continues to be on logistics, attention will turn to the February bloom and the weather watch will continue. Similar to the new commercial for the iPhone 13 Pro Max: focus will keep jumping from one thing to the next; what is important now is soon to be overshadowed by something else tomorrow.

Upcoming Milestones:

Shipment Report: February 11, 2022
NASS Acreage Report: April 21, 2022
Subjective Estimate: May 11, 2022
Objective Estimate: July 6, 2022

Week 4 Update

Bullish Trends:

• Domestic shipments for December were a record 64.3 million pounds shipped. An increase of almost 6% over last year.
• Market levels remain at great value for buyers as interest has significantly picked up this week, and business gets done.  
• Buyers continue to emphasize, “all we need is a stable market;” it appears the market is established for now.

Bearish Trends:

• As logistic issues continue to create backlogs of shipments, pressure on pricing will remain.
• Missed shipments translates to lost consumption in many export markets. This will be difficult, if not impossible, to recapture.
• Uncommitted inventories remain an issue, as we see an increase of 26.7% over last year at this same period. This is pointing to what will be the industry’s largest carry-out in history.

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