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Almond Market Update - November 19, 2021

Fog has returned to the valley, of the like we have not been seen in many years.  This is attributed to the “atmospheric river” we experienced two weeks ago moistening the ground, followed by cold temperatures. For the newbies to California, it may come as surprise, but growing up in the valley I recall going weeks without seeing the sun.  Fortunately, one does not have to go too far to get out of it. If and when it becomes too much to bare, just head to the foothills or the bay area.  One sad note, Heavenly Valley will not be opening this weekend as once planned.  The snow we received two weeks back has already dissipated and there have not been any significant storms since.  Just a reminder, the drought continues.

Last week the  Almond Board of California released a very disappointing shipment report.  Shipments for the month were only 217 million pounds, this was off by -30% from last October, which we should recall was an all-time record shipment for the industry.  Nevertheless, the market has reacted this week and we have seen prices fall by as much as $0.10/lb. to $0.15/lb. on some varieties and sizes.  Even the most difficult sizes of NPX fell in price, which may lead some to believe there are larger sizes coming. However, the reality may only be that there was little demand at the beginning of the week and as transactions start to take place those hard to find sizes may begin to rise again. Already as the week finishes, we have seen the market start to inch up and take back some of the lost ground in pricing.

All major markets are off. It is easy to assign blame to the port issues and explain away the export shipments being off but even domestic shipments are down. This does suggest perhaps that some buyers are still working through old inventory. 

The industry now sits -14.6% behind in shipments compared to last year with 652 million pounds having shipped thus far compared to last years’ 764 million pounds. Last year as most know was an outlier with an historic bumper crop. The industry reacted very aggressively last year with the uncertainty the pandemic would have on world demand and sold early with lower prices. This resulted in prices that most consider unsustainable for two years consecutively.

Next Shipment Report: December 14, 2021 

Week 47 Update

Bullish Trends:

  1. Brushing aside last year as an outlier, and compare shipments thus far of 652 million pounds to the 2019 crop of 609.5 million pounds, we are doing rather well and would be ahead 6.5%.
  2. Given all the surrounding circumstances, the industry remains healthy with plenty of time to match up supply to demand in the months ahead.
  3. Prices have eased this week and resulted in buyers starting to buy. Taking advantage of the historical lows.

Bearish Trends:

  1. With shipments far behind and now heading into the holidays, California will have two days less to ship this month. This trend of lower shipments may continue grow.
  2. More importantly commitments are behind. There is more work to be done in an ever shortening time period to get business done.
  3. The crop is looking to fall between 2.85 to 2.95 billion pounds. With the carry-over of 608 million pounds, it seems the supply this year is not much different than last year.

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