Almond Market Update - October 23, 2020
We are having an Indian summer in California. With this extended hot and dry weather, the harvest has been uneventful in terms of no issues with rain. This has helped with the extended harvest period needed to bring in this large crop. As I drove from Northern California to the South today, it was evident that harvest is all but complete now.
Having driven past several Huller/Shellers, it was amazing to see just how packed they are and in full tilt production, just as we are as processors. It is an exciting time!
The September position report is now two weeks behind us. Reflecting on the aftermath, we have seen those motivated buyers coming to the table to complete transactions. Interestingly, they are keeping with a hand to mouth strategy and that may be a good strategy. Based on the position report, we can see that there are different trains of thought. The high level of commitments indicates that many are booked for the long run. With these historic low price levels and understanding their demand, why not? Others are booked through the end of the fourth quarter allowing them flexibility in 2021. There is no right or wrong strategy, as with low market levels and plenty of almonds this year expect to see a stable market with a marginal trading band throughout the season.
Week 43 Update:
Bullish Trends:
- With future commitments and shipments well ahead of pace, the industry is well positioned to keep our future strong for the long term. Continued demand for Q1 and Q2 is evident based on recent sales trajectories.
- October shipments have been stronger than ever and it is shaping up to be the single largest shipment month in the history of our industry. November is already full for most processors as well.
- A week does not go by without news of new almond product innovation coming down the pipe. Now “Impossible Burger” is getting into the plant based beverage business.
Bearish Trends:
- With such strong shipments in the fourth quarter, pipelines will be full and demand will likely decrease come the first of the year.
- The industry will need to continue to keep pressure on production and shipments if we expect to meet the marketing objective of double digit sales for the crop year.
- COVID-19 will be an issue through this year, we can only hope it will end soon and all our families, friends and neighbors remain safe.
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