Almond Market Update - June 3, 2021
The forecasted triple digits for the valley on Monday did not disappoint. As temperatures rose well over 100 degrees in most areas throughout the valley, snow pack was being reported at zero for June 1, 2021 across 22 locations in the state. This is unprecedented as we head into the summer with virtually no runoff from the Sierras. It was also reported yesterday that all the reservoirs in the state are now at less than 50% supply. The implications of where this puts us is not being fully realized.
We await the May shipping report due out next week. Expectations remain strong that May shipments will exceed last May by 40% or more. While June has started out somewhat quiet on the sales side of things, India has started to show signs of strength as activity for inshell is driving demand.
The market is showing some modest firming this week on specific grades and sizes with anticipation of next week’s report. In addition, new crop sales have been approached more conservatively this year thus far when comparing to last year at this time. As we get through next week’s shipping report and closer to the objective estimate, we will see new crop activity start to pick up.
Remaining Benchmark Dates:
Next shipping report: June 10, 2021 (new crop sales will be reported)
Objective Estimate: July 12, 2021
Final shipping report for the 2020 crop year: August 12, 2021
Week 22 Update:
Bullish Trends:
- With what is expected to be significant water shortages this year, crop yield is in question and could lead to less supply than expected.
- We are already seeing demand starting to catch up to supply, with only a few varieties and sizes out of balance with demand, prices are starting to firm up.
- Each week restrictions are easing and leading to market upticks. Travel over the Memorial weekend was at record levels not seen since pre-pandemic periods.
Bearish Trends:
- With new crop sales trending behind last year at this time, this could lead to falling prices in the months ahead.
- With a larger carry-over, we can debate all we want over the new crop size, but ultimately we may have as many or more almonds to sell for the 2021 crop year as we did in the 2020 crop year.
- Shipping issues persist and will continue to hamper the industry. Freight costs are also skyrocketing and will impact the bottom line.
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