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Almond Market Update - May 6, 2020

This week brought more beautiful weather to California and the sun shined brightly on the almond orchards.  While there has been some reports of more drop (trees shedding some almonds) than normal, an excellent crop remains expected.  Next Tuesday is a big day as both the subjective estimate and the April position report will be released. 

In these reports, we will be focusing on the shipments for April and the commitments going forward for the remaining crop year.  Most of the industry is estimating a carry out of 450 million pounds.  We will have a better idea in a week.  This should represent a smooth transition versus the last two years of tight transitions with little available stock.

Additionally, the subjective estimate has historically been the most accurate tool we have had for forecasting the crop size.  We look forward to comparing it to the previous estimates and seeing how it is interpreted by the marketplace.

Week 19 Update:

Bullish Trends:

  1. April shipments remained strong through the month, shipments of +180 million pounds are expected with next week’s report, the fifth month in a row of record shipments.
  2. The EU came in strong over the last week lending stability to the Standards grade, for which other varieties are traditionally based off of.  
  3. Pricing is now at the lowest levels we have seen in over a decade. As they say, “the best cure for low prices is low prices.”

Bearish Trends:

  1. Many markets remain shut down and this could persist for several more months. Once markets do open, what will this look like?
  2. With a much larger crop expected and market activity around the world at a minimum, the industry has to determine how to bring demand into alignment with supply.
  3. As we have continuously experienced further softening, buyer confidence is low and many are waiting to see some extended stability before booking additional volumes.

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