Almond Market Update - March 14, 2022

Our dry California weather continues as we begin to experience spring-like conditions. We will see low 70-degree temperatures throughout the valley for the next 10 days with a chance of rain coming early next week. Each day the Sierra snowpack loses ground over the previous month and is now roughly 60% overall to normal. Drought conditions are further ahead compared to a year ago and will present a serious problem for California.

The Almond Board of California released the February shipment report, and it was anticipated to be off from last year as export shipments continue to falter due to logistics issues. With 146 million pounds shipped versus a year ago at 164 million pounds, the industry now trends -20.66% behind last year in export shipments with 993 million pounds shipped YTD versus 1.25 billion pounds YAGO in exports. It should be reiterated that the demand is there; unfortunately with the continued shipping woes that plague us we are unable to meet the customer demand. Nevertheless, the result remains the same, as supply greatly exceeds the missed consumption opportunities as time passes and exporting struggles continue.  

Surprisingly, domestic shipments are also well below from a year ago with 53 million pounds shipped in February versus last year’s 70 million pounds, off -24%.  For the year, domestic shipments are -3.4% behind a year ago with 445 million pounds shipped, versus 531 million pounds a year ago. 

As mentioned earlier, California will struggle this year with their water situation, and while it may not have any effect on the current supply of almonds, the reality is there may be a lasting effect on the future of almonds in California should the drought continue much longer. We had the driest January and February on record and the dry conditions have continued into March. The 10-day extended forecast shows no significant rain or snow.  

Upcoming Milestones:

Shipment Report: April 12, 2022
NASS Acreage Report: April 21, 2022
Subjective Estimate: May 11, 2022
Objective Estimate: July 6, 2022

Week 11 Update

Bullish Trends:

• Crop receipts appear to be topping out with the current forecast in the range of 2.92 billion pounds for the year.
• Market activity has increased as more buyers see these current levels as a good time to take coverage and guarantee they receive their product in time as most packers are currently out through April.
• Size constraints continue to be a challenge as specific varieties become scarcer even with such a large crop. We are seeing increased price gaps grow larger between 27/30 AOL and 30/32 AOS.

Bearish Trends:

• With new sales for February at 215 million pounds, slightly better than last month’s 207 million pounds, this may be a disappointment to many after a strong December (new sales of 247 million pounds).
• There seems to be little momentum as the market continues to find itself and shipping issues continue to drag on. With a one-billion-pound carry-out staring the industry in the face it is hard to imagine a scenario now that would promote anything other than sell, sell, sell.
• The bloom is now over, trees have quickly moved to nutlet formation and the likelihood of any significant damage from the recent freeze may be less intense that what we anticipated. We are still waiting to see the impact of those cooler temperatures.

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