Almond Market Update - September 15, 2021

We were awakened to the sound of thunder and bright lightning strikes Friday morning, quickly followed with a cloud burst of rain.  Yes, rain in Northern California after waiting for over five months, it was a beautiful thing!   Hopefully this will be a sign of things to come.  While it was only intermittent showers that lasted briefly, it was a breath of fresh air… literally!  Our skies have needed a cleansing after so much smoke and ash from our fires.

Friday also brought the position report from the Almond Board of California.  This marks the first shipment report for the new 2021/2022 crop year.  On the first page there is a note that the crop receipts are now being reported three days prior to the publication date. “Previously USDA incomings were downloaded on or near the first business day of the month following the reporting period.”  While this new method is more accurately capturing the previous months receipts, it is also going to initially skew the numbers in the beginning.  Therefore, you will notice that in the first month we are already 14.5 % ahead in crop receipts to last year. It is expected to even out more as we get through the next few months of receipts.

August shipments were 207 million pounds, up 7.4% over last year and a new shipping record for the month of August.  Anyone thinking that inventories were excessive and shipments would trail off may have miscalculated.   Despite shipping issues persisting, exports were up 11% over last August, while domestic eked out a 1% increase.   Most prominent are Northeast Asia, with South Korea, Japan and China, while Western Europe was led by Spain and Germany.   For more of the report please click here.

For all the good news, there must be some not so good.  We continue to see a high percentage of small kernels as we process the Nonpareil and other early varieties.  As a result, you may experience some not willing to offer larger kernel sizes yet until later in the season when we hopefully see a turnaround.  Thus far the majority of the kernel sizes have been in the 27/30 to 30/32 range. 

I mentioned last week “flexibility” being the operative word for now.  Until more options become available through further processing and the other varieties which are now just starting to be harvested, the industry will do their best to satisfy your needs with what we have available.

Week 38 Update:

Bullish Trends:

1. Shipments remain strong thus far, with yet another record shipment in August to start off the new crop year (record shipments eleven out of the last thirteen months). 
2. Regardless of firmer prices, these levels still represent lower prices than we have seen from a historical perspective and remain lower than what we had just 18 months ago.
3. With the likelihood of a smaller crop this year, and the possibility of a continued drought in the west, the industry will proceed with caution.  We continue to hear reports of 15% to 20% down from region to region.

Bearish Trends:

1. With rising prices, the industry may not see the same type of shipping numbers enjoyed last year.  While the crop may be smaller, there is a 597 million pound carry-over versus 450 million pounds of a year ago.
2. The industry may have gotten ahead of itself, with this major slowdown in forward sales (as demonstrated in -32% commitments versus last year), trying to play catch-up later could result in market weakening.
3. It is still early in harvest and to be suggesting the crop may be off by so much and the kernel sizes are so small may feel a little self-serving to many that have followed the industry for a long time.

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