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Almond Market Update - May 19, 2022

We have moved closer to summer temperatures this week with highs of 98 degrees throughout the valley floor. Hotter temperatures are in our near future as we will see triple digits early next week. The drought continues and with precipitation only 50% to normal for California this year, it will be al long hot, dry summer. Our snowpack now stands at 18% to normal (where California gets over 35% of its water). Additionally, California Reservoirs are at 49% to their capacities overall. This is shaping up to be one of the most challenging times for California growers that they have perhaps ever experienced.

Last week the Almond Board released the April position report. The industry shipped 245 million pounds for the second straight month signaling the industry may have unlocked the mystery to successfully exporting stocks. Just as importantly, it may show what lies ahead for the remaining three months of the 2021/2022 crop year, this would bring the carry-out to a more manageable range of 830 to 860 million pounds, helping to better balance future supply to demand.

While export shipments for April were up +1.7% 183 million pounds, over last year’s April shipments of 180 million pounds, domestic shipments were disappointing, off –10.9% 62.43 million pounds compared to last April’s 70.0 million pounds. Hopefully this is simply a timing issue and does not speak to possible economic conditions we are experiencing.

Shipments are now 1.923 billion pounds shipped year to date versus 2.23 billion pounds shipped last year same time -13.48% behind.   Yet we are trending positive with new sales in April of 168 million pounds, up from last year’s new April sales of 163 million pounds.

Upcoming Milestones:

Position Report: June 10, 2022
Objective Estimate: July 6, 2022

Week 21 Update

Bullish Trends:

  1. The NASS report released the subjective estimate for the 22/23 crop to be 2.8 billion pounds, this appears to be in sync with market sentiment and if correct, would put the next crop down 100 million pounds from the current crop and 300 million pounds down from 20/21 crop.
  2. The industry added 167.8 million pounds of new crop sales in April +3% increase over last Aprils 163 million pounds, continuing to increase total committed shipments ahead of last year at the same time +4.24%.
  3. Amidst all of the turmoil with logistics, drought conditions and continuing raising fuel prices, Almonds continue to maintain a consistent value over other commodities. There has never been a better time to purchasing and consuming almonds.

Bearish Trends:

  1. With increased acreage over last year, it will be interesting to see if the crop really does harvest smaller than last year. Only time will tell if the crop size is truly coming down. We will see what the objective estimate points to in July.
  2. While shipments have improved, the industry will continue to fight the long-term logistics drag of moving this crop and the next crop.
  3. Conventional Grocery Retail Snack nut price levels have not reflected where the current market is, remaining high regardless of lower almond levels. This has kept the demand flat, not allowing the economics of market pricing to pass to the consumer.

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