Almond Market Update - August 20, 2020

California is experiencing a heatwave that is prolonged and more intense than anticipated.  This has been ongoing for the last five days and is expected to continue for the next 7 to 10 days with temperatures in excess of 100 degrees each day.  It has been widespread and exceeds records set over a decade ago.  We also saw rain in various regions of the state over the weekend as well.  Only time will tell any effect it may have on harvest.

Speaking of which, harvest continues to gain momentum as we start to see additional regions come to life including portions of Northern California.  Initial reports are siding with the narrative that kernel sizes are smaller than last year.  Generally speaking, this is a usual occurrence with early harvest starting in the south region with sizes and quality both improving through the harvest as more regions report.  However, these reports are being shared throughout all regions now and have thus far shown nothing larger than a 25/27.

Last week the Almond Board of California released the July shipment report; this represents the final month of the 2019 crop.  The industry shipped a record 180 million pounds in July, up 17% ahead of the 154 million pounds shipped during the same period last year.  This brings a total shipment for the 2019 crop year to 2.372 billion pounds, +4.80% ahead of a year ago, and brings the carry-out to 446 million pounds into the 2020 crop.

New crop commitments are now at 696 million pounds, which represents 24% of the crop (if we in fact harvest 3.0 billion pounds).  This is well ahead of the same time last year when we had 14% of the crop sold.

Week 34 Update:

Bullish Trends:

1. Buyers have taken advantage of excellent market levels and booked accordingly, evidenced from the Almond Board’s report.  As a result, the market has been firming.
2. Import markets have yet to book heavily and will start now on more of a traditional purchasing schedule.  The selling season has really just started, as we have seen activity from India, the Middle East and Turkey.
3. Initial harvest reports indicate that the crop may not reach the full potential of 3.0 billion lbs.

Bearish Trends:

1. With 3.0 billion pounds estimated and a carry-over of 446 million pounds, there are still plenty of almonds to be sold.
2. With COVID-19 still an issue, what will this do to the markets that continue to struggle and remain either shut down or subdued?
3. The almond industry will need to grow this year’s shipments by double digits in order to avoid an even larger carry-over next year.

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