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Almond Market Update - September 8, 2022

California continues to experience one of the most extreme heat waves this September, having already set over 20 new records. We have had nine days in a row exceeding 104 degrees or higher, with the peak of 116 degrees in the valley this week. We are expecting a break on Saturday, with temperatures dropping to the low 90’s to mid-80’s by next week.

Labor Day, along with an already slow period, has created a very quiet market. With the upcoming position report to be released this Friday by the Almond Board of California, we see growers and buyers content with the August shipments numbers. With August representing the first month of the new crop year, it is not only important from a psychological standpoint for the industry, but simply setting the stage for the months ahead and getting back on track after a less than stellar July.

Sellers are currently supporting short shipment windows as the harvest has been mixed with results similar to last year as it pertains to kernel sizes, smaller than previous years. Reports are also leaning toward other varieties beside Nonpareil also being off. Additionally, shipping issues have only marginally improved. Chasing the market will not help in this regard. Simply states, seller sentiment is that current selling levels are unsustainable as yields decline and the drought continues to add additional pressure to growing.

The next report will reflect the actual carry-out from the previous crop year into the new crop year and establish what the total marketable crop will be. No doubt the carry-out is the key factor in holding the new crop market in check. With that being said, we may see the spreads start to grow significantly between higher quality Nonpareil, Independence, Carmel Types of 27/30 and larger versus lower grades of other Cal varieties and smaller 32/34 AOS.

Upcoming Milestones:

  • Position Report: September 9, 2022
  • Position Report: October 11, 2022

Week 37 Update

Bullish Trends:

  • With the crop yields down and continued growing concerns, the supply side is quickly aligning with demand. Growers are content to even hold on to their carry-out to assure a more stable and sustainable market level.
  • The heatwave remains a big question mark regarding the effect on the conditions of the trees and how much water will be available for post-harvest irrigation. Growers will hold back even more on selling their new crop until they have a better understanding of potential impacts.
  • Demand for almond ingredients is growing each day. This is an ideal outlet for many of the sizes and varieties carrying over into the new crop year.

Bearish Trends:

  • With little demand, the market is getting off to a slow start. This seems like a repeat to last year when the industry fell behind early on and struggled to catch-up to usual numbers.
  • Whether the crop is a 2.6-billion-pound crop or not is mute; the carry-out may be close to 850 million pounds and that adds up to a total supply within 100 million pounds of last year.
  • The industry can ill afford another crop year as the last; it is time to sell, preferably into a stronger market.

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