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Almond Market Update - July 29, 2022

Harvest has officially begun. Driving through the southland on Saturday, one could see shaking going on throughout much of the drive. It will only continue to ramp up from here as the rest of the state will also start to get very busy. In the meantime, weather in California remains very hot and dry. The average temperature this week in the Fresno and Bakersfield area was 105 degrees, and is expected to stay the same through the weekend.

With the objective estimate forecasted at 2.60 billion pounds, growers and handlers are focused on moving the current crop with little concern for new crop sales. As a result, discounts are being seen on some of the industrial grades of almonds where the majority of the supply remains. With a possible decreasing supply two seasons in a row, growers are willing to sell slowly into the new crop with the likelihood of firming prices in the months ahead following harvest. The exception to this can be seen with new crop inshell sales which will be the first packed for export shipments in late August/September.

July marks the final month of the 2021/2022 crop year, with August 1st starting the new crop year. The industry stands at 2.46 billion pounds shipped for the year. There are high hopes for a strong July shipment report, with anything north of 200 million pounds as the ideal number. 

Upcoming Milestones:

Position Report: August 12, 2022

Week 31 Update

Bullish Trends

  • With nonpareil expected production to be hit the hardest this season (down 12% over last year according to the USDA), new crop pricing has been firming and will be expected to rise due to possible supply constraints.
  • Many are wondering if the heavily stressed orchards (due to the drought) will even produce 2.60 billion pounds. While it is too early to say for sure, it is evident that many orchards are light with almonds on the trees.
  • Diminishing production should help to bring supply back into alignment with demand bringing market levels back to more sustainable levels for growers allowing them to operate once again in the black.

Bearish Trends:

  • With the Port of Oakland shut down all of last week, due to the AB5 protests, the likelihood of a good July shipment number has been compromised.
  • The idea that an 800 million pound carry-out is a win for the industry is a stretch. Especially when much of this stock is of industrial grades with limited demand in the first place.
  • Full attention now turns to harvest and what underlying stories this will bring for the new crop. In the meantime, the carry-out will increasingly become a major part of the narrative.

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