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Almond Market Update - August 13, 2021

The California central valley continues to experience a heatwave with temperatures exceeding 100 degrees over 10 days now.  It is forecasted to continue through the weekend.  Of course, this does nothing to help our situation with wildfires or the drought as concerns continue to escalate.  While this may not be something most Californians think about daily, it is at the forefront of every grower’s mind and remains headline news.

The almond market has reacted in a most defensive posture as most have paused this week anticipating the shipping report that was released early Thursday morning. 

The Almond Board of California released the July position report representing the final report of the 2020 crop year.  The industry shipped an astounding 2.898 billion pounds of almonds growing sales to +22% ahead of last year, setting shipment records never believed possible, especially under the circumstances of COVID-19.  We should not be too surprised considering the resiliency of the almond industry and the work that has been done marketing almonds around the world.  

For the month of July, it was another historical record shipment at 229 million pounds, +27% over last July. This sets the stage for excellent momentum going into the new crop year.  Speaking of new crop, new crop sales are standing at 441.5 million pounds, and if we do harvest 2.8 billion pounds this year, that translates to 15.75% of the crop already sold.

Week 33 Update:

Bullish Trends:

  1. With total committed shipments (sold, not delivered) of 344 million pounds, +30% over last year and new crop sales of 441.5 million pounds, this totals 785 million pounds which is approximately 23% of the total crop supply for 2021/2022.
  2. With the industry shipping so strong to close out the year, the carry-over has now shrunk to a very manageable 597 million pounds. Unfortunately this means potentially less total supply versus last year if the crop does come in based on the 2.8 billion pound estimate (-100 million pounds).
  3. With growing concerns over water supply and the potential effect the drought may have on the next crop year, we have already seen the reluctance for the industry to sell new crop too quickly.  Translated: Firming Market.

Bearish Trends:

  1. Last year at this time new crop sales were at 696 million pounds, so if the crop does come in larger than the 2.8 billion expected, this may shift the pendulum back in the buyer’s favor.
  2. Pricing last year at this time was much lower, and shipments started out with a bang.  This year pricing is much higher, +$0.50/lbs. in many cases.  This may affect some of those hesitant to jump in right away.
  3. There is a lot of information to be considered yet.  While the Objective Estimate is calling for a 2.8 billion pound crop, historically, the Subjective Estimate has been more accurate and that was 3.2 billion pounds.  Where will we be come this January in regards to our drought?

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