Almond Market Update - March 17, 2022

This week, California saw some rain, albeit short-lived and unfortunately not enough to move the needle in terms of relieving us from drought conditions. Another storm is expected for Saturday and is anticipated to bring additional moisture to the area. Keeping fingers crossed!

Following last week’s position report released by the Almond Board of California, we have seen some weakening as the industry continues to fall behind in shipments. With port and logistical issues remaining, the industry was only able to ship 199 million pounds in February. While this was an improvement compared to the 177 million pounds shipped in January, and in line with industry expectations, it is worth mentioning that this is still 15% lower than shipments compared to last February. Exports were 146 million pounds this month, down 11% from last February, while domestic shipments were just 53 million, which is 24% down from last February. Total shipments this season now stand at 1.433 billion pounds, down 16%. New sales in February were 215 million pounds, which only goes to show that demand for almonds continues to be strong, especially at lower prices. Currently, the only bottleneck facing the industry is shipping conditions.  

Overall, the industry has sold 78% of the crop and 66% of total supply.  At this same period last year, the industry was at 83% of the crop sold and 74% of total supply sold. It is evident we are behind as an industry, and have our work cut out for us. With growing costs continuing to rise, and low water allocations in place, growers are reluctant to take a hit now and prefer to wait and see how the 2022 crop develops over the next few months.

Upcoming Milestones:

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

Week 12 Update

Bullish Trends:

1. With crop receipts topping out now, the crop is looking more and more like the original estimate every day; it should finish around 2.92 billion pounds.
2. New crop sales for the month of February were at 215 million pounds, an increase over January’s sales of 207 million pounds, proving the demand is there.
3. Size constraints are prevalent as specific varieties become harder to find now. Reports of a shallow supply of NPX #1 27/30 and larger is evident as the pricing gaps grow higher on these sizes now.
    

Bearish Trends:

1. Regardless of any positive trends occurring, they may be overshadowed by the growing supply as shipments continue to trail behind last year.
2. With the growing season now in full force, there will be a larger crop coming with increased bearing acreage on the way, despite the freeze we experienced earlier this year.
3. Coupled with an exceptionally large carry-over never seen by the industry, we will likely have a record supply of almonds next year, keeping pricing controlled for some time to come.

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