Almond Market Update - August 28, 2020

California wildfires continue to rage on and everyone throughout the state is affected and experiencing significantly poor air quality.  Yet the harvest must go on, and on it goes.   Temperatures throughout the state have moderated, but we do expect temperatures to remain in the mid to high 90’s for the next 10 days.

Harvest continues with the Nonpareil variety being one of the first to be shaken and processed.  To date, the turn out and yield has been disappointing with average sizes being between 27/30 and 30/32.    As a result, offers have become hard to find as many growers hold off until more data is available and only time can provide that.  Next up will be the pollinizers (all other varieties) to be harvested once all the Nonpareil and other early varieties have been picked up. This will be a very important indicator as these varieties make up the other 60% of the crop, which hold the key to how the 2020 crop will be determined and remembered.

With the July shipment report's results from two weeks ago and the ongoing harvest (thus far turning out less than stellar results), the market has firmed.  It is safe to say, the bottom was reached and we have seen an immediate bounce for the time being.  It is very difficult to find grower support today even at the higher prices from a week ago.  Patience will be required as the industry sorts out what will be available.  Kernel sizes are questionable thus far, and it will be difficult to offering larger sizes until we know we have them.

Week 35 Update:

Bullish Trends:

1. With buying activity taking place throughout the major markets now, pressure has been applied to the bottom of the market.  Offers are close to impossible to find as the market sizes up the crop, with over 25% of the new crop already committed.
2. We have seen activity strengthen from India, the Middle East, Turkey, and China.  The EU is soon to follow suit as local inventories deplete.  Domestically speaking, the activity has really started to kick in as well, but unfortunately matching up supply to demand is a struggle at the moment.
3. Initial harvest reports are not matching with the strong expectations, causing many sellers to pull off of the market for time being.

Bearish Trends:

1. The almond industry will need to grow shipments by double digits this crop season to avoid a large carry over into next year.  With over 25% of the crop committed to, many have already booked their needs leaving more crop left at this point than the industry had to deal with all of last season.
2. COVID-19 remains on everyone’s mind, how does this play into future demand and the ability to open up other all-important channels such as food service?
3. With a 3.0 billion pound crop estimate and a carry-over of 446 million pounds, there are still plenty of almonds to be sold and while the industry has a nice start, there is a long ways to go!

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