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Almond Market Update - September 4, 2020

The temperatures in California's Central Valley moderated down to the low 60’s at night and highs of low 90’s this week.  This is allowing the firefighters to take advantage as they start to get a grip on the fires still burning, now closer to a 50% containment in most areas.   Unfortunately, it will be short lived as temperatures are forecast to reach as high as 109 by Sunday throughout the greater part of the growing region.

Harvest continues with the Nonpareil variety.  As we look out the windows from the Hughson Nut facility, we can see the sweepers across the street picking up almonds.  More shaking is ahead, as all the final varieties will now start to be  harvested for the remainder of September and first part of October.  As stated last week, this will be a very important indicator for the 2020 crop and the footprint it leaves will most certainly be a determining factor on where the market goes from here.

With the July shipment report and the 2019 crop in the history books, the August shipment report is due out September 11th.   We promise you it will not spell doom and gloom.  In fact, it has a chance of being an all time record shipment month for the industry as a whole. 

With a month of harvesting completed now, we continue to see small size kernels trending with an average size of 27/30.  It stands to reason, considering that we had a perfect bloom, nut set was strong throughout the tree. With so many nuts on the tree, the energy was divided amongst so many kernels, creating this circumstance.  Perhaps as we get further through the processing we will see larger sizes start to come which has historically been the case.  Only time will tell.

 

Week 36 Update:

Bullish Trends:

  1. Buying activity continues to emerge throughout all markets as the economy restarts.  With certain sizes unavailable, pressure is being applied to what is available on both a local level and what is afloat.  
  2. We continue to see activity strengthen from India, the Middle East, Turkey, China, and now Europe.   Domestically, with most of the current crop carry-over spoken for, it has put supply (for the time being) under pressure for prompt sales, until new crop can be readied.
  3. With that said, the kernel sizes are not matching up with the demand for 25/27 or larger at the moment. This has caused a further pricing spread on the larger sizes.  But the point is moot, as we do not have them to offer at this time.   

Bearish Trends:

  1. The almond industry will be looking 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 perhaps leaving more crop left at this point than the industry had to deal with all of last season.
  2. This is no time to see growers getting bullish with so much left to sell and the crop not necessarily matching up to the demand of the customers.  It will take time to convince customers to move to smaller sizes and disruption is most likely to occur.
  3. COVID-19 remains on everyone’s mind and just how this plays into future demand continues to weigh heavy. The ability to open up other all-important channels, such as food service, will be a critical factor to reach that all needed double digit growth.

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