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Almond Market Update - March 19, 2021

The growing season is well underway.  Temperatures dropped this week and we saw some minor precipitation as well as some hail storms throughout various growing regions; however they were thought to be minor with no significant damage to the orchards.  The lack of rain and snow pack is top of mind now.  It is looking more and more like a drought year, as a March miracle (large wet storms) has all but slipped away.  Unfortunately, the extended forecast does not show any significant weather headed our way. Irrigation will be highly restrictive and costly for the growers. With low market levels and another large crop on the way, the economics do not appear to be in the grower’s favor.

 

The industry has had a week to absorb the Almond Board’s February shipment report.  Shipments of 234 million were a pleasant surprise (this is after a 6.9 million pound adjustment was entered due to a handler under-reporting in previous months).  This has led to a firming trend over the weekend and continued into this week as we see business being settled across the globe.  

 

March shipments, despite still being restricted at the ports (due to shortages of containers and ships delayed at ports), are expected to continue to trend ahead of last year with another record month over month.  Last year the industry shipped 208 million pounds, expectations are to exceed 230 million pounds this month.  The next shipment report is due out on April 9, 2021.

 

Overall shipments are 16% ahead of last year at this time, with 1.7 billion pounds shipped year-to-date.  We are starting to see some restrictions on specific sizes and varieties despite the large crop.  This is mainly due to the level of commitments and low market levels.  With restrictions on the larger sizes this year, emphasis was placed on moving the 27/30 and 25/27.  That laser focus is now impacting the supply of those as well now in the Nonpareil variety.

 

Week 11 Update:

Bullish Trends:

  1. With a strong shipment report for February and another record coming for March, we are seeing acceptance of a firming market in recent days.
  2. Even with this firming trend, prices remain very aggressive and buyers continue to take advantage as they work to cover their remaining needs for the crop year.
  3. Evidenced by the business currently on the books for processing, we continue to see consumption throughout the markets as we build demand through the pandemic and restricted markets.

 Bearish Trends:

  1. Experience says that the third and fourth quarter will be loaded with inventory from current crop, just when new crop is being harvested.  With the industry’s largest carry-over coming, where is it all going to go?
  2. Pressure will remain not only to sell the remaining 875 million pounds of uncommitted inventory, but also to ship it.
  3. The growing season is well underway. With another excellent event-free bloom, the 2021 crop will also be sizeable, although too early to estimate.

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