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Almonds Update:

April 2017

Yesterday it was reported that Shipments of almonds from California totaled 178 million lbs. in March, up 10.6% from shipments of 161million lbs. in March a year ago. Domestic shipments were up an incredible 34.8% at 56.2 million lbs. and Export shipments were up only marginally at 2.2% or 122 million lbs.

On the supply side, the 2016 crop is essentially delivered at 2.131 billion lbs. Allowing for some stragglers, most are basing their crop calculations at 2.135 billion lbs. This exceeds the NASS objective estimate by 85 million lbs or 4%. Likewise, the Nonpareil crop was underestimated by 5% with deliveries to date sitting at 821 million pounds.

Total sold, committed plus shipped to date, calculates at 84% of the 2016 crop. This compares to 76.0% last year and the highest percentage committed/shipped since 2009 at this point in the season. This well sold positon, would suggest the industry will start to see shortages develop in specific varieties and grades.

Post bloom weather conditions have been excellent with mild sunny days with the occasional weather systems passing through the valleys. Orchard moisture levels are at optimum levels and the record snow pack should keep water deliveries flowing for the entire growing season.

As a result, the crop is progressing nicely with reports of variability in varieties and locations depending on the success of pollination. The Almond Board will release the California Almond acreage report on April 26th and the NASS Almond Objective estimate will be released on May 10th.

We anticipate the market to be relatively steady and we are not likely to see much volatility during the month ahead. This could change once the Acreage Report and NASS Subjective estimate are released.

March 2017

Yesterday it was reported that California handlers shipped 152.3 million lbs of almonds in February, down slightly (1.8%) from shipments of 155.1 million lbs in February a year ago. Domestic shipments at 51.8 million lbs were about even compared to a year ago. Season to date shipments at 1268.9 million lbs (August – February) are now up 28% versus last season.

For California sellers, the sales is even more impressive when considering the market environment over the past month which has had to deal with a mostly cold and wet bloom which motivated many sellers to the sidelines. Then, in typical seesaw fashion, warmer and sunny conditions over the past 10 days have likewise demotivated buyers. As a result pricing over the past month has reflected weather related dynamic. Following the storm system that moved over the entire growing region in mid-February price jumped by about 10 to 15 cents per lb. Over the past week or so we have seen pollinator levels retracing most of the gains while nonpareils have hung a little tougher

The question all are asking is; “what the effect of weather will be on the 2017 crop”. In short, nobody yet knows. There is a range of “market talk” with some expecting a crop size range of 2.1 to 2.2 billion, others push this to 2.2 to 2.3 billion, while also hearing the occasional 2.0 to 2.1 billion range as an opinion on the “market expectation”. The reality is that due to the weather the crop has lost potential, particularly for the nonpareil and associated pollinators. While there is a good chance that the crop will surpass the 2125 million lb level of current crop receipts, it will likely not be with a margin wide enough to put pressure on prices.

Shipments for the 2016 season are on track to total close to 2100 million lbs. California will enter the 2017 crop with a very manageable, even necessary, carry-out of close to 400 million lbs. The 2017 crop will need to be every bit of 2150 million to 2200 million lbs to keep demand supplied at these price levels. Most expect the momentum in demand and shipments to continue. Already March looks to be a busy month for handlers, while at the same time most markets still need to cover much of their summer needs. It’s worth repeating… a good 2017 crop is needed and there is clearly a risk that this may not materialize, with the associated risk of a firming market.

Upcoming dates to keep in mind. April 11th, March Position Report. April 26th, Acreage Report. May 10th, Subjective Estimate.

February 2017

Over the past week, before the release of the shipment numbers yesterday, most of the talk of expectations for January shipments clustered around an increase of 10% or so. So yesterday’s report showing California shipments at 165.8 million lbs, or 28% up from last January’s 129.2 million lbs will be viewed as impressive from those in California.

At the core of the sturdy number are continued strong domestic shipments (up 27.3% at 57.3 million lbs). Strong contributions also came from India, Western Europe, Japan and South Korea. Some trader dominated markets, perhaps eyeing new crop prospects and fearful of weakening values, were less lively. The Middle East was flat, while China was down as well.

With six months now under their belt, the midpoint season-to-date shipments now stand at 1,117 million lbs or 33.4% ahead of last season.

January receipts of 2016 crop added another 46.4 million lbs to bring the total thus far to 2108 million lbs. With wet weather in California motivating hullers to clean up stockpiles most do not think that there will be much left to be reported in the ensuing months. One can confidently pencil the final crop near 2125 million lbs (average yield 2360 lbs/acre on 900,000 bearing).

Focus is now on new crop prospects. The wettest winter in decades in California has taken the drought card off the table. Snow pack is currently at over 180% of average while reservoirs are in flood control mode. Storms have had a welcome southerly component, with strong San Joaquin flows enabling Delta pumps to run, bringing water back south for ground storage recharge. All in all a very good winter for growers.

Temperatures are now starting to rise and bloom has begun in the south end of the valley (usually a few days ahead of central and northern growing regions). This morning early varieties had about 5% blossoms on mature blocks. With warmer days most anticipate that bloom will be well underway by mid to late next week. Weather forecasts show the storm door still open, with unsettled conditions anticipated tomorrow and then on Thursday next week. With now approximately 960,000 bearing acres waiting to be pollinated for the 2017 crop, the yield multiplier has a big influence.

Over the next few weeks the main influence will be bloom weather. Today’s report, however, reiterates that almonds are being sold and shipped at record volumes. The domestic shipment number underlines the pull from consumers as lower prices hit the shelves. For some varieties and sizes it is going to be a very tough transition to new crop.

It will be against this underpinning of strong demand that day to day weather conditions are considered. Currently the market is already factoring in significant jump in production. We advise that California will need to produce over 2300 million lbs to allow for a moderate 5% to 7% growth in shipments. Although quite possible, a 2300 million lbs crop is not a fait accompli.

With California sitting at about 78% sold and shipped, selling pressure will be moderate over the balance of the season. While Europeans may have decent cover (shipments up 21% season to date), the overall sense is that there is still significant buying to be done elsewhere and buyers for now are banking on a good bloom. It will be an interesting few weeks, but we believe there is most likely more upside than downside risk to this market.

January 2017

The monthly report came out yesterday and it was reported that California handlers shipped 156.2 million lbs of almonds in December, up 15% from shipments of 135.4 million lbs in December last year. Shipments to most destinations were up strongly. Domestic buyers took 15% more than last year.

Total season-to-date shipments now stand at 951 million lbs, up 34% over 708 million lbs in the first five months a year ago. The pace cannot continue as there will not be enough almonds. If over the remaining seven months of the season California ships at the same pace as last season (assuming zero growth), AND plugging the final crop in at 2100 million lbs, total shipments will be 2054 million lbs and the carry-in to next season will calculate out at 415 million lbs (about the same as the carry-in to this season). So not much room for shipment growth over the balance of the season.

A 2100 million lb crop is now a reasonable number to use. In December handlers reported receipts of 132 million lbs, bringing the total so far to 2062 million lbs. The 132 million lbs suggests that most hullers finished in December. The industry has seen in recent years much higher December figures as hullers continued chewing through large crops (315 million in 2011, 198 million in 2013). December receipts last year totaled 94 million lbs and another 44 million subsequently trickled in. In 2014 another 61 million lbs arrived post December. The sense is that there is another 40 to 70 million lbs out there and 2100 million lbs is still a good number to work with.

Recent storms, lately being called “atmospheric rivers”, in California have been welcomed. Rainfall totals are well ahead of average. Rivers are running higher than most reservoirs can handle and flood control releases are being made. Note thought that temperatures have been higher than normal, and most of the moisture is in the form of rain not snow. What that does is make Chilling hours a concern. Nevertheless the net effect is tremendously positive and California growers are now in a significantly better water supply position versus a month ago.

Firm pricing despite favorable winter weather reflects a comfortable seller position for current crop. Coming back from the holidays we share that many buyers starting to work on relatively uncovered forward positions, but concentrating on nearby needs. There is still significant buying that needs to be done. In spite of this, we prices are not expected to rise much from current levels. New crop prospects have been brightened by the recent rains. The dollar has appreciated over most currencies and buyers will likely continue to play it close as they get through bloom and summer.

As we always do this time of year, we continue to caution that availability on certain items will tighten, with particular concern for nonpareil as inshell becomes increasingly hard to find and popular grades and kernel sizes dwindle.

December 2016

The November shipments were reported at 187.5 million lbs, up 33% or 47.0 million lbs from shipments of 140.5 million lbs in November last year.

Commitments were reported at 550 million lbs, down by 37 million lbs from the end of October but still ahead of last year’s pace by 120 million lbs. The changes reflect new sales of about 150 million lbs in November.

November receipts totaled 372 million lbs – a busy month for hullers, but well down from 558 million lbs in October and well off the record November pace of 438 million lbs seen in 2011. Total receipts of 1930 million are now ahead of last year by 9.9%. Extending this gain through the end of the year puts the final crop at 2085 million lbs – perhaps reasonable.

Following last month’s strong October shipment report the market went quiet and pricing slipped by about 15 to 20 cents per lb. Only Nonpareils saw a little more pressure as Indian buying abated and Chinese reselling softened premiums.

Strong shipments over the last several months put California sellers in a comfortable position. Let’s put the crop, for argument sake, at a guess of a final number of 2100 million lbs (50 million lbs more than the official forecast), the committed and shipped still suggests 65% of the crop is spoken for. This is strongest position since the 2010 season. However the flip side is that buyers have also bought and at least for now do not appear to be lining up for more.

US politics have taken center stage, with little attention left for much else. Currencies in general have depreciated against dollar, making California almonds more expensive. Individual markets have their challenges. In India, demonetization has essentially brought activity to a halt, with informed locals saying it could be March before they come back to the table. Chinese buying has likewise been slow over the past weeks and we note earlier reselling from Hong Kong traders.

The 2016 crop is very manageable and California should easily sell the balance at current price levels. The buyer game for now has been to shift the focus to next crop and winter weather. It will be interesting as usual to see how this plays out. Buyers should be cautions to not underestimate the strength of almond demand at their peril. Sellers need to keep moving almonds in willing markets to customers that they will need over the next several seasons.

We do not expect that today’s numbers should significantly change price levels either way.

November 2016

October unleashed almond shipments at a record pace. The total of 235.5 million lbs far surpasses last October’s 162.6 million and sets a new all-time monthly shipment record.

Chinese shipments lead the way at 40.9 million lbs (up 128%), Vietnamese shipments of 12.9 million (up 286%) are factored in. Domestic shipments (up 19% at 60.1 million lbs) and strong pulls from the Middle East where the UAE and Turkey combined to boost the region to 22.4 million lbs (up 52%). Shipments to India were relatively muted at 16.7 million lbs (up 17%).

Season-to-date shipments now total 607.1 million lbs, 41% ahead of shipments at the same time a year ago.

Crop receipts added 568 million lbs in October to total 1559 million lbs, up 110 million lbs compared to the same time a year ago. Still too early to say what this means for the total crop, but it is interesting that hullers slowed down by 63 million lbs (about 10%) versus September receipts. Most continue keep their expectation for the crop in line with the 2050 million lb forecast.

Following last month’s strong shipment report prices jumped 10 to 15 cents as some sellers pulled off the market. Prices then held for about 2 weeks in thin trading before sellers emerged and prices dropped back down. Over the past couple weeks prices have held steady and the market has been active since the last drop.

Many in California would argue that with this type of demand there are not enough almonds to maintain the shipments at a 40% increase versus last year. November shipments are already lining up to be strong and by the time they get the next shipment report in December 65% to 70% of the crop will already be spoken for. To get through to next crop shipments will have to slow and in addition the industry will likely reduce the carry-over to well below 400 million lbs. Price has already done some of this slow-down work.

Buyers, on the other hand, are understandably are not as sure about the longer-term outlook. Underscoring this point the recent Almond Nursery Sales report shows 108,000 acres of trees were sold since last June, estimating 77,000 acres of new planting and the balance to replace existing orchards. The same report 2 years ago estimated tree sales for new plantings at 48,000 acres – which will start to show up in 2017 crop bearing acres. Although not breaking news, the reminder that almond acreage continues to grow despite drought challenges is sobering as the industry gears up to sell significantly larger crops over the next several years.

In the short-term we expect sellers will try to push prices but do not expect any dramatic changes as many buyers are now covered through bloom. The next chance for readjustment to the fundamental picture will be the receipt number in December and then of course the all-important but unpredictable winter weather in California which will set the tone for the rest of the season.

October 2016

Commitments are no less emphatic. At 640 million lbs, end September commitments are 199 million lbs ahead of last year. This infers new sales in September at a record 359 million lbs. Looking back, the next closest monthly sales tally was 276 million lbs in October 2014. Total committed and shipped now account for 50.3 % of the forecasted 2050 million lbs crop. We will have to go back to 2009 and 2010 to find a similarly sold position this early in the season.

Harvest has moved quickly along, with the last variety Fritz coming out of the orchards about week or two earlier than last year. September receipts at 631 million lbs bring the total for the season to 990 million lbs so far, ahead of last year by just under 70 million lbs. Harvest weather has been dry and favorable. Insect damage is lower than a year ago. Yields in the south are running higher than a last year, while the positive comparison dissipates as you move north. Nonpareils are sizing about a size bigger than last year, while buttes and padres are sizing surprisingly small. At this stage it appears that view of the crop between 2050 and 2100 million lbs is still reasonable.

Since last month’s position report similarly showing both strong shipments and sales, prices have increased about 30 cents per lb.

Prices rise as the market attempts to ration supply. If the crop results near 2050 million lbs there are only enough almonds to increase shipments by about 10% versus last season. Until the crop proves higher than this a firming market is rational in the face of shipments that over the past 6 months are running over 50% higher than Apr – Sep shipments a year ago. Indeed, since April California has shipped 1029 million lbs.

Strong shipments and strong commitments out of this report should further bolster seller confidence. The commitment number ensures strong shipments in October and November and puts the industry in a strong position as they all try to guess the final crop number. Sellers will have to wait until December in the hope that the crop is bigger than expected and/or winter weather is favorable for the 2017 outlook. In the meantime for the next 60 days, most see little opportunity for weakness and likely can expect further firming.

September 2016

California shippers started strong for the first month of new crop this past August, shipping a record 170.0 million lbs in the first month of the 2016 crop season. While strong inshell shipments were expected, the 34.8% increase versus last August shipments of 126.2 million lbs becomes possible only when all major markets pull their weight. Domestic shipments were up 9% at 58.8 million lbs. Western European shipments driven by strong German and Spanish numbers were up 39%. Canada and Mexico pulled 54% more. Surprisingly Middle East shipments were up 47%, with Turkey making up for relatively flat Dubai shipments. As widely anticipated, India was the star of the show, but at 35.0 million lbs (up 146%) their performance was even a little better than expected.

So shipments were terrific, what about sales? Everyone has been talking about the quiet market and buyers waiting for crop news. Perhaps not so. It seems that new crop business has been quietly, but actively booked. The August report is the first time one can get a look at new crop commitments, and commitments for both domestic and export are well ahead of last year’s levels. Total commitments of 481.8 million lbs are more than 110 million lbs (30%) ahead of last year at the same time.

As a percentage of total available crop California is now sold and shipped at 32.4%. This compares to 26.8% at the same time a year ago and is back to more typical levels for this time of year (32.8% in 2013 and 31.9% in 2014).

On the supply side, they are seeing nonpareil yields per acre in the south well up (about 25%) from last year, while central is up more modestly and northern growers are a little off last year’s levels. However, we remind you that nonpareil in the South was off sharply last year and in general they are seeing yields still a little below those seen in 2014. The crop is coming in cleaner than last year and nonpareil sizing a little larger. The acreage number continues to be the wild card, nevertheless on what they know at this point they would characterize the crop as good but not spectacular and feel comfortable with the 2050 to 2100 million lb range as a realistic expectation.

The market over the past month has been behaving as the crop is perhaps a little higher than this, with buyers concentrating on nearby positions and seemingly confident that deferred needs can be bought later. We have seen the bottom end of the market stay remarkably steady. Today’s report lines up on the sellers side, with only a few weaknesses to temper the message. In summary, lower almond prices are working to boost sales and shipments. In addition, it is anticipated that buying still needs to be done. Europeans are just returning from summer, Indians have not booked past October, Chinese buying to our knowledge has been moderate, domestic USA buyers are resetting their programs, the Middle East seems to be working around the hang-over in Dubai. At the same time the crop still has the potential to surprise as we start getting into pollinator receipts. California sellers would be well served to keep prices steady and sales flowing until the supply is better known.

July 2016

California shipped 174.0 million lbs in June, up 15.4% compared to shipments of 150.8 million lbs in June last year. Strong export shipments accounted for all of the increase, while domestic shipments of 53.4 million lbs were down slightly (1.7%) from last June.

Last week the Objective forecast of 2050 million lbs was welcomed by California sellers, while buyers who had waited in anticipation of a larger number (we would put overall expectations at around 2100 million lbs) resigned themselves to the new reality and pent-up demand was seen over the past several days, particularly for early inshell shipments to India and China.

Prices prior to the Objective had eroded by about 20 to 40 cents per lb (depending on the item). This was a little surprising in light of the strong May shipments and reflected concern for a large 2016 crop, while further complicated by turbulent currencies following Brexit.

Post forecast prices have rebounded by about 15 to 20 cents per lb. Manufactured levels, sticky as usual, had perhaps slipped 10 cents per lb but have firmed again, up about $0.20 cents per pound.

Year to date shipments now total 1672.7 million lbs, down 1.0% versus a year ago. With one shipping month now left in the crop year California looks poised to carry about 420 million lbs into the 2016 season. 420 million lbs is not enough to fully ensure availability of all varieties and sizes.

Adjusting for the traditional 2% loss, the 2050 million lb forecast suggests sellable tonnage of just over 2000 million lbs. the view in California will be comfortable to carry out an additional 50 million lbs or so into the 2017 season – inferring a comfortable shipment target of about 1950 million lbs for the upcoming season. To put this in perspective, this sets a target of about 8% over last year and very similar to the record 2013 season when California shipped 1937 million lbs.

In short, supply appears to be manageable at current price levels. Early new crop shipments to India and China will be strong which should keep sellers confident. Meanwhile early harvest results and receipts will be keenly watched, but unlikely to tell anything certain until several months from now. Almonds continue to be the value nut at these levels. Good demand and a stable to firm market is anticipated under the current fundamental outlook.

July 2016

2016 Crop Objective Estimate:

NASS released the Objective forecast today at 2050 million lbs. This is up from the Subjective forecast of 2000 million lbs and about 8.2 % up from last year’s crop of 1895 million lbs.

The market now has a number it can work for the next few months – at least until reliable harvest information starts to emerge.

Over the past couple of months strong shipments have whittled the carry-over expectation into the 2016 crop to less than 450 million lbs. Already the industry is feeling the pinch of the transition as certain items deplete. With a 2050 million lb crop California sellers will have to increase shipments by an achievable 8.2% to maintain a similar carry-over into the 2017 crop and the market will price itself accordingly.

2050 million lbs will settle worries for now for both seller and buyer alike and likely will have a supportive effect on pricing.

June 2016

Handlers shipped 178.1 million lbs in May, up 27.6% versus 139.6 million lbs a year ago. Continuing the pattern seen in April, shipments to price sensitive markets continued to perform well. China up 365%, India up 58%. Gateway destinations Vietnam and Pakistan with significant volumes up 1991% and 1672%, respectively. Strength was seen in Turkey (up 109%) and UAE (up 25%), while strong shipments to Spain (up 27%) helped European shipments to a 15% increase over last year. Capping the argument that low prices are doing their work, domestic shipments posted a 1.9% over last May.

Prices last month jumped up about 25 cents per lb after the strong April shipment number was reported in early May. Buyers are finding gaps in the offerings, with NPS 27/30 and smaller Californias being noticeably scarce. Strong demand for inshell pushed NPIS levels by about 35 cents per lb. Current crop is trading a small premium to new crop levels. With the exception of prompt needs we do note buyer hesitancy to wholeheartedly commit as much of the focus remains on supply expectations.

With May numbers under its belt, California is now looking at carry-over at well under 450 million lbs. Perhaps carry-out is closer to 430 million lbs (assuming a 10% shipment increase in June and July). This is a significantly different outlook compared to a few months ago when 500 million lbs plus was feared.

It is clear that most are anticipating a final higher than the Subjective 2.000 million lbs. Most would forecast at 2.100 million lbs, suggesting the need for shipments over the next season to increase by 10% or so – which appears well within reach at current price levels.

The market went down on shipments and is recovering on shipments. If buyers were looking for the signal that current prices are justified, perhaps this month’s report will be enough. Meanwhile, sellers will be reassured that prices are working and will likely keep offers firm as they approach the Objective Estimate on July 6th.

 

May 2016

 

We have seen almond prices firm over the past couple of weeks.

We can point to the surprisingly low preliminary 2016 bearing acreage of 900,000 acres reported by NASS on April 27th as the primary catalyst. The number, which factored in 45,000 acres of removals, surprised most observers who had been anticipating bearing acres to increase by 20,000 to 30,000 rather than a very moderate 10,000 acres from last year. This figure is important in that it is the driver for the NASS Subjective and Objective Estimates. Consequently we saw offers scaled back and sellers chasing business in anticipation of the Subjective Estimate released yesterday and then the April shipping numbers released this morning.

Bottom line, reluctant sellers have been rewarded by both numbers.

The Subjective Estimate came in at 2.00 billion lbs – at the low end of industry expectations. After calling around to growers representing 27% of the California acreage, NASS plugged in a forecasted yield number of 2220 lbs per acre, up only 4.7% from last year’s computed yield of 2120 lbs per acre.

The April shipment number was reported today up 10.9% at 167.5 million lbs – a surprisingly strong performance and suggesting that low almond prices are already having an effect. As expected, strength came from export markets, up 26.2% at 116.5 million lbs. Domestic shipments are as yet unresponsive to prices and posted another loss (13.2% down at 50.9 million).

Today prices are still in flux as the market figures out an appropriate reaction to the numbers. Prior to yesterday’s Subjective Estimate market levels had increased by about 25 cents per lb since last month’s report. Market levels after the Subjective number have been tough to pinpoint – we hear perhaps another 10 to 15 cents but too early to pinpoint any trades.

Stepping back from the excitement its noted that even if shipments continue at 10% over last year over the remaining months of the 2015 season, handlers will still carry-out over 450 million lbs into next crop. We also remind that the Subjective Estimate has underestimated the crop 13 times in the last 20 attempts.

There are still almonds to be sold out there. An interesting, but unanswerable question is how much of the unsold is now in the hands of call pool sellers. One opinion is that it is higher than usual. Although the 2.00 billion lb crop number will bolster confidence in the short-term, most do not expect that many sellers will be keen to hold excess inventory into the 2016 season. Once prices have adjusted to the supportive news of the past days the market should find a more stable footing as sellers reemerge to finish off their campaigns.

February 2016

Yesterday it was reported that California almond handlers shipped 129.2 million lbs in January. Although up 12% versus shipments of 115.4 million in January last year. Domestic shipments were down 15.2% at 45.0 million lbs. Export shipments which were severely crimped last year due to strikes at the port, were up 35%. For a perspective, total January shipments over the previous three years averaged 157 million lbs.

Crop receipts were reported at 1872 million lbs as handlers added another 22 million lbs in January. This is a marked slowdown from December numbers and suggests that the end of the crop is in sight. Most can now safely anticipate the final crop to be close to 1900 million lbs.

Almond prices continued on the defensive over the past month. The December position report which reported the larger than anticipated 2015 crop together with the continued slow shipments further dropped the market.

For the next three weeks all eyes are on bloom. Going into bloom growers are in a much better position than a year ago with ample chilling hours and a Sierra snowpack now standing at 105% of normal. In the southern end of the valley blossoms have just started appearing, with rapid progress over the past two days as unseasonably warm weather has hit over the past week. Bloom is anticipated to be well underway within a week in the Southern Valley and caution that weather forecasts show the high pressure ridge degrading and the potential for rain in the valley next Wednesday. If all remains good, the potential for a good bloom is in the works, but a potential good bloom does not always a potential for good crops. With El Nino conditions persisting, weather is going to be a wild card along with other unknown factors such as good pollination occurring, as well as the potential for a fast bloom.

The 2016 crop size becomes critical as buyers and sellers contemplate the current supply/demand pressures. Year to date shipments now lag last year by 82 million lbs. If shipments do not increase versus last year’s levels over the remaining 6 months of the season California will carry over around 500 million lbs into the next crop. Barring a mishap during bloom a middle of the road assumption of 2150 lbs per acre on 920,000 bearing acres seems reasonable – resulting in a crop of nearly 2000 million lbs. Should this occur shipments are going to have to increase by about 10% during the 2016 season in order to keep the carryover at a manageable level. We have seen this type of double digit shipment growth in 5 of the past 10 years, however with a strong dollar and world economic headwinds factored in it looks like continued low prices will be need to spur a repeat.

It’s been a quiet market over the past 2 weeks and the reality is that if things don’t pick up, some sellers might get a bit anxious. Keep in mind that Non Par has been the only variety that has been in a well sold position and one could argue that pricing may adjust if the market does, but maybe not at the same rate.

January 2016

Yesterday it was reported that California shipped 135.4 million lbs of almonds in December, down 8.6 % from shipments of 148.1 million lbs in December a year ago. Weakness was seen in both domestic (down 11.0%) and export shipments (down 7.4%). Season to date shipments now lag by 11.9% versus a year ago. Sellers who waited for this report to bring good news will be disappointed.

Crop receipts continued to grow in December, adding another 93 million lbs to total 1850 million lbs. After the November report showing 307 million lbs of receipts it has been widely expected that the crop would easily surpass the 1800 million lbs NASS forecast and price weakness over the past month or more has in a large part been driven by a market coming to grips with the new reality. Historical receipt patterns after December suggest that a final 2015 crop of 1900 million lbs or a little more is now reasonable.

Commitments are reported at 418 million lbs, down 12 million lbs versus November and suggesting new sales of 124 million lbs in December. If they forecast the crop at 1900 million lbs and account for 2% disappearance, the California sold and shipped position now stands at 60%. This is lower than usual for this time of year. Over the past several years this number has ranged between 65% and 81%. The last time a similar number was seen at the end December shipped and sold position was in 2008 when worldwide economic uncertainty shook confidence.

Weather conditions so far for the upcoming 2016 crop have favorable. Winter has started with several storms sweeping across California and short-term forecasts are expecting the pattern to continue at least through January. El Nino conditions suggest that good moisture though March is likely. Thus far rainfall totals are a little behind normal levels, but more importantly snow-pack is running ok. Temperatures have been colder than last year and ample chilling hours have been reported. The flipside of weather concerns is that conditions may result in a wet and cold bloom.

Buyers have been understandably cautious over the past month. At the same time more selling pressure was seen as call pools and previously bullish handlers came to grips with slow shipments and bigger crop. So how much further can this go and where is the bottom? No easy answer. The sold and shipped position suggests that there is still more selling to do in the short-term. Its anticipated that buyers will continue hand to mouth, but this volume may increase as stocks are now already drawn down to bare minimums and as prudent industry buyers will likely hedge a portion of their needs ahead of bloom. Ultimately with the 2015 crop now being where it is the market needs to see shipments increase to avoid a heavy carry-out into a potentially bigger 2016 crop. Lower prices will spur shipments, but it will take time. Underlying consumer demand continues to be strong, but momentum has been lost and the price pendulum typically swings further than it needs to in order get things moving again.

December 2015

Today it was reported that California shipped 140.5 million lbs of almonds in November, down 3.5% from shipments of 145.6 million lbs in November a year ago. Season to date shipments now stand at 572.2 million lbs, off by 82.4 million lbs or 12.6% versus a year ago. Domestic shipments were down for the second consecutive month, off 5.2% at 48.8 million. Despite strong inshell shipments to India and China, total export shipments were down 2.4% at 91.7 million lbs.

Crop receipts continued strongly in November, bringing the total to 1756.3 million lbs. Last year November receipts totaled 211.1 million lbs and subsequently added another 138.7 million to final the season at 1867 million. While many hullers did finish last month there still those that extend hulling into December and January. Clearly the crop is going to exceed the 1800 million lb Objective estimate.

Commitments at 429.5 million lbs are down from last month (446.0 million) and lower than last year’s 455.6 million lbs. The change in commitments suggests lackluster new sales of 124.0 million lbs in November.

Following the weaker October shipping numbers a month ago, prices dropped another 15 to 20 cents per lb. Lower levels were met by keen buyers. European industrial buyers in particular emerged to cover 2016 needs. Encouraged, sellers started pulling off he market or raising levels.

Taken as a whole, this month’s report has a lot to reveal. Shipments are lagging by 12.6% versus a year ago. Port strikes last year muddied comparisons in October, but the view is now clearing. The improving crop cannot be dismissed any longer. Meanwhile structural problems (read defaults and renegotiations) in Dubai and India still need time to unravel, taking the edge off new buying. Industrial buyers will likely be quiet in December as they head off for the holidays and watch storm patterns and chilling hours in California – which so far have been favorable compared to last year. That all said, there continues to be a belief in the strength of underlying demand for almonds and that pricing is already close to levels that can clear a crop similar to last year’s size. Nevertheless, it is believed that today’s report is going to minimize the chance for higher prices until weather threatens 2016 production with the most likely chance for this coming up in February.

November 2015

On Shipments of almond from California handlers totaled 162.6 million lbs in October, overall down 20.6% from shipments of 204.6 million lbs in October a year ago. October crop receipts totaled 527 million lbs, a 50 million lb slow down versus receipts of 577 million lbs in October last year. Total receipts for the season now stand at 1,449 million lbs, down 68 million from a year ago. The 2015 crop came in quickly from the field and there should be little excuse for hullers to slow down in October and one might infer that the crop is tracking the Objective forecast of 1800 million lbs, down from 2014 final crop of 1868 million lbs.

Almond prices over the past month have reflected growing concerns that shipments are slowing and that the crop might not be as off as early harvest results suggested. For the first half of October prices bounced higher from a 50 cent correction seen in September with standards popping about 20 cents up to around $4.20 per lb, but were unable to sustain as buyers backed off and some sellers that had been caught flat footed continued to offer into thin demand. By the beginning of this week standards were seen closer to the $3.70 to $3.80 range. In short the slowing demand has been due to high pricing, but for context here is really the factors in play this season:

Chinese traders less confident than last year (devalued currency, reduced economic growth outlook), while recent smuggling related arrests have dampened enthusiasm. Indian industry digesting high price purchases done before the season. October Indian imports at 12% higher than last year while helping the California export totals do not bode well for the Indian domestic market as high priced purchases will continue to land over the next month or two. Several decent little storms to start the winter and El Nino promising more to come. While never a guarantee, the odds are more in favor this season.

Today’s report shows season-to-date industry shipments lagging 77 million lbs behind last year. Meanwhile if you pencil the crop at 1800 million lbs (the NASS Objective number) they will have about 70 million lbs less supply. Consequently if California can ship at the same rate as last season over the remaining the 9 months there will be balance with a similar carry-over to last year. Price levels have now corrected to similar ranges that were seen in mid-August last year, which worked to sell the bulk of the 2014 crop, suggesting that all things being equal that current pricing could suffice??

However, we now know that all things are not equal. Another key difference this season versus last year has been price progression. Price started high and have moved lower, eroding buyer confidence and damaging usually reliable distribution channels. This is particularly true in key trader focused markets (India. China, Dubai). Today’s report will likely not provide a confidence boost and more time is likely needed before a bottom is seen.

October 2015

On Friday the monthly shipment numbers were released and Almond shipments from California totaled 142.9 million pounds in September, down 12.3% versus shipments of 163.0 million pounds in September a year ago. Domestic shipments were up over 4.4% at 50.6 million pounds, a new record for the month of September. Exports contrasted sharply, down 19.4% at 92.4 million pounds. The last time shipments were below 100 million was in September 2007.

Likewise the commitments grew to 440.4 million pounds, up 13.9% over the same period last year. Sales for the month of September were 212 million pounds or almost double of last year’s level.

Crop receipts, somewhat of an irrelevant number for this time of year, came in at 922.4 million pounds just 1.8% lower than last year. Nonpareil receipts to date are 513.7 million pounds, down 19 million pounds from last year. Extrapolating last year’s receipts percentages the 2015 Nonpareil crop is estimated at 541 million pounds or the smallest Nonpareil crop since 2007.

September 2015 will go down as one of the most volatile on record. Trading at nearly record highs, prices turned down sharply in September. Prices went through a free fall only to recover upon a frenzy of buying activity.

This has to be one of the most trying times for virtually all almond participants. A convergence of challenging marketplace conditions, a slowdown in emerging markets, specifically the financial crisis in Dubai, strong dollar, record high prices and questionable consumption all created an atmosphere of uncertainty and volatility.

August 2015

Yesterday the Almond Board of California released the final monthly shipping report for the 2014 crop with little notice or deviations from market expectation.

The total production of the 2014 crop was 1.868 billion pounds down 232 million pounds from the NASS estimate of 2.1 billion pound. Given the carry in of 350 million pounds, the total supply for the 2014 marketing year was 2.16 billion pounds, down 4.6% as compared to 2013 crop year.

Shipments for the month of July were down a total of 7.5% with domestic down 3.1% and export down 10.6%. Crop year shipments totaled 1.812 billion pounds down 6.4% with the domestic down .4% and export accounting for 9.5%. The expected carry out is 350 million or identical to the carry in this year.

We continue to see very limited activity in the marketplace as handlers focus on the harvest and the buyers are busy seeking an understanding of retail demand at these record high prices.

For now the 2015 Nonpareil harvest is underway with very disappointing results on the initial deliveries in the southern part of the valley. There are consistent reports of Nonpareil yields falling 20% below last year’s levels and sizing trending to the smaller side of the spectrum.

It is still early and we will follow up as more information becomes available.

Mid-July 2015

Yesterday, it was reported that California almond handlers shipped 150.8 million lbs. in June, down 1.3% from record shipments of 152.8 million lbs. in June 2014. Year-to-date shipments are now running 6.36% below a year ago almost matching the 7.03% decrease in crop receipts to date.

Despite continuous reports within the industry of declining domestic consumption, the domestic shipments were up 1.8% setting a new record of 54.3 million pounds for the month of June.
Exports shipments were down slightly, -3% at 96.5 million pounds, as compared to last year’s record shipment of 99.5 million pounds. June 2015 represents the third largest June on record.

The 2015 Objective Estimate of 1800 million lbs. released last week was 50 million pounds less than the Subjective Estimate confirming the general perception of limited supply especially in the Nonpareil variety. Consequently with growth domestically, steady demand internationally and the unabated water fears, the industry has seen prices surge 20 to 25 cents to levels seen in late May.

The harvest will begin in a matter of weeks. There are no data points on the horizon that potentially could change the supply or demand scenarios in the marketplace. A firm market is most likely here to stay for the balance of the summer with many handlers approaching the market with extreme caution fearful of the risk associated with high pricing and potential shortfalls in many categories.

July 2015

Yesterday the Objective crop forecast was announced at 1.80 billion pounds.   The National Agricultural Statistics Service (NASS) forecast cites possible insufficient chilling hours, early and fast bloom and the lowest nonpareil crop in 5 years forecast at 670 million pounds. 

 

The forecast comes in at the lower end of expectations and will likely support pricing, that in recent weeks had seen erosion.  

 

The following chart summarizes the reduction in totally supply slipping to the lowest levels in since the 2010 season and the likely impact on shipments.

 

 

2010

2011

2012

2013

2014

2015

Carry-In

321

254

335

317

350

331

Crop

1,628

2,020

1,884

2,010

1,865

1,800

Marketable

1,579

1,980

1,848

1,970

1,809

1,746

Total Supply

1,900

2,234

2,183

2,287

2,159

2,077

Shipments

1,668

1,899

1,866

1,937

1,828

1,800

 Carry-out

254

335

317

350

331

277

Lb/Acre

2,130

2,540

2,300

2,364

2,144

2,022

 Bearing Acres

770,000

800,000

820,000

850,000

870,000

890,000

June 2015

It was reported that California almond handlers shipped 139.6 million lbs in May, down 2.8% from shipments of 143.7 million lbs in May a year ago.

Season to date shipments are now lag 6.8% behind a year ago. With only two more months left in the crop year it is now fairly certain that the carryout will be about unchanged from the carry-in of 350 million lbs.

Breaking it down a bit it appears that inventory levels are now starting to constrain what can be sold and shipped. On that note, commitments dropped by 34 million lbs to 332 million at the end of May, suggesting sales of 105 million lbs for the month. Nothing exciting, but enough to keep hand-to-mouth demand supplied as buyers bridge the gap between crops.

There is not much change in the 2015 crop outlook with the market still keying off the 1850 million lb Subjective estimate, with the caveat being adequate water to finish the crop. Nonpareil appears to be lighter than last year while pollinators (Mission Type) perhaps look to be gaining a little confidence. We are seeing a scarcity of new crop nonpareil offers, while pollinator offers now more readily available.

Following the strong April shipping report in early May, prices ran up another 10 to 15 cents per lb, but have stabilized over the past couple weeks. Dwindling current crop and firmly held new crop continues to be bid high, reflecting a strong premium over kernels. Manufactured pricing has been relatively steady over the past month.

Going forward we continue to anticipate a firm pricing environment until the market knows more about the 2015 crop. Sellers are about done on current crop and not feeling any need to hurry on new crop sales as drought uncertainty continues. At the same time buyers have covered most of their summer needs, would probably like to book more heavily new crop but are not pushing.

The Objective estimate is slated for July 1st. Given last year’s miss, it is unlikely that a strong number will garner the same attention it may have enjoyed in the past.

Mid May 2015

The monthly shipment report was released yesterday and it was reported that California almond handlers shipped 151.1 million lbs in April, up 9.7% from shipments of 137.7 million lbs in April last year.

In addition to strong shipments, handlers took advantage of demand in April to add another 167 million lbs of sales, resulting in commitments increasing by 16 million lbs to 366 million lbs. The industry now sits in a comfortably sold position of over 96%.

The 2015 Subjective Estimate of 1850 million lbs released last week reinforced market perception of a relatively tight supply outlook with the potential to become even more constricted as growers try to finish the crop with uncertain water supplies. Consequently with strong demand, limited availability and a backdrop of drought we have seen prices run up another 20 to 25 cents since last month.

Yesterday’s report plays into already strong seller hands. Although summer needs were partially covered there will still be some “topping up” to do out of current crop. Bids this morning are already up $0.05 cents - $0.10 cents per pound from yesterday. There is little left to sell in California and sellers will take their time to offer.

New crop needs are essentially uncovered and one can’t leave too much at risk for much longer. Small Carry over, strong demand, fear of a small crop than reported are all likely things to push prices higher another notch. A firm market is likely here to stay until future crops become more of a sure bet.

May 2015

The subjective production forecast for the 2015 California almond crop was released today and it is 1.85 billion pounds, according to a survey conducted by the National Agricultural Statistics Service. Forecasted production is 1 percent below last year's production of 1.87 billion pounds and 8 percent below 2013’s production of 2.01 billion pounds.

March 2015

The monthly California Almond Position report was released today and it was reported that California handlers shipped 140.0 million lbs of almonds in February, down 6.3% from shipments for 149.3 million in February a year ago. Reflecting an easing west coast port situation export shipments at 90.7 million lbs are improved from January’s total of 62.3 million lbs, but still down from last February’s total of 94.8 million. Strong shipment growth was seen to China and Dubai, while most other destinations were well off last year’s totals. Meanwhile, domestic shipments at 49.3 million are down 9.5% from a year ago. Although one month does not make a trend, domestic shipments will need to be closely watched over the next few months. For now the domestic numbers may provide the most reliable view of underlying consumer demand as stocks are replenished after the holiday retail season.

Crop receipts continue to trickle in, adding another 15.9 million lbs in February to total 1854 million lbs. A final crop number might now be honed in at close to 1.865 million lbs.

Commitments slipped by 73.6 million lbs which is relatively slow for February but not much of a surprise as buyers stepped back after an extremely strong month in January (257 million lbs of new sales) and watched good bloom conditions unfold in the central valley. The overall sold and shipped position is now at 82.5% of the 2014 crop, a relatively comfortable position for sellers and not suggesting the need for undue selling pressure going forward.

As we get into the second half of the game, buyers and sellers have more solid facts to work with but with some continuing uncertainties. The 2014 crop is reasonably certain at 1.865 million lbs. Bloom was good and the next crop with approximately the same to 25,000 more bearing acres has the potential to be equal to or even surpass the last crop significantly. So far we are hearing that the nonpareil may be light again,. From what we can see a range of 1850 million to 2000 million would be reasonable starting point to the conversation. Water continues to be a huge long-term issue.

In summary, shipments are lagging by 13.2% year to date. High prices and the strong dollar are doing their work. If March through August shipments pick up the pace and come in at the same levels as a year ago (718 million lbs) then the carry out is going to grow by 50 million to around 400 million lbs. This is not intimidating IF the 2015 crop is at a similar level to 2014. However a larger crop will need a corresponding increase in shipments. At current price levels an increase in shipments is not looking like a sure bet. We do see new crop market makers trying to get traction at 15 to 20 cents discount to current crop levels. For now this looks reasonable. However we anticipate most sellers will wait for a clearer view of the 2015 nutset before getting too anxious on either current or new crop sales.

January 2015

December position report came out today and likely the most important number in the report is the crop receipts figure which is at 1805.7 million lbs. The December increase of 77.6 million lbs is a sure sign that most hullers finished in November and there is not too much left to go. Most can now safely pencil the crop closer to 1850 million rather than 1900. Compared to the Objective Estimate at 2100 million lbs at the start of the season this is significantly short. The miss, however, has been anticipated by high prices over the past several months and this time those in California would feel they got it right.

In light of the numbers, continued weakness in shipments is looking to be in balance with supply and unlikely to cause too much concern. In December California shipped 148.1 million lbs, down 6.0% versus 157.6 million lbs in December a year ago. Domestic shipments were up slightly versus last year (up 2.0%). European shipments (down 19%) and Middle East (down 36%) continue to lag. In Asia there are some interesting developments. Chinese December shipments, including Vietnam, at 17.3 million lbs are up 260% versus a year ago. Indian shipment are off 18%.

Prices over the past month have been relatively stable amidst cautious buying and selling. Coming back from the holiday break there has been a flurry of interest for inshell, primarily from Indian buyers who are eyeing low local stocks and the need for additional cover before Australian inshell becomes available in a few months. Inshell pricing firmed by about 10 cents per lb over the past week. Some feel Pressure is starting to be felt in the NP kernel market -- with prices firming about 5 cents per lb. California pricing, which relies more on the European and domestic market has remained relatively uninspired.

After today’s report showing the short crop now more of a certainty most can now expect continued confidence from California sellers. In the short term, given the low Indian December shipment number we might expect inshell demand to spill over into next week. Meanwhile, many European buyers coming back from holidays have been waiting for some relief from this report will be disappointed and forced to cover prompt needs despite a weak Euro. Also supportive is the ongoing drought uncertainty. California is ahead on rainfall totals, but it has been warm and snow levels are well behind normal. All in all most anticipate firm pricing as we head into the bloom weather market in early February.

November 2014

Yesterday the Industry Monthly Shipping report was released. October and November are critical shipping months for the California almond handlers. Over the past two seasons these two months have accounted for about 22% of annual shipments. So it was with some relief to many in the industry to see that shipments totaled 204.6 million lbs. This is 24.0 million lbs shy of last October’s total, but still a very respectable number considering the high price environment and the lightly committed position reported at the beginning of the month.

In addition to the decent shipping number commitments actually increased by 72.1 million lbs to 458.8 million lbs, suggesting new sales in October totaling 276.7 million lbs. This is strongest sales month on record for the industry (previous record being September 2011 with 250.2 million). So as a result one can humbly deduce that California is proving that tonnage can be sold at these levels. The numbers reflect what most have seen over the past few weeks…good demand, and willing sellers, resulting in a brisk market.

If the sales totals play into seller’s hands, then the receipt number will balance the picture and should keep confidence in check until more is known. Hullers continued to run at capacity speed in October, adding another 577.3 million lbs to total 1516.9 million lbs season to date. This is 131.7 million lbs ahead of last year at the same time. It is clear that hullers did not run out of product in October and will likely deliver again at a strong pace in November. Beyond that is conjecture. Over the past two seasons well over 600 million lbs came in after October, but likely this would be overly optimistic given what has been heard about yields. Most industry observers have been penciling the crop at somewhere around 1900 million lbs with a few outliers calling for a crop significantly lower than this. This crop receipt number puts the low end forecasters out of the running, and opens up the possibility of a larger crop than previously anticipated. Most will know better in another month.

In summary this report gives both buyers and sellers something to work with. We expect that patience will be exercised by both buyers and sellers between now and the end of the year. Another 100 million lbs in crop receipts will make a difference, but probably not enough to shake the confidence of sellers who are now over 50% sold and shipped (let’s assume a 1950 million lb crop for this argument) and who are still eying the potential for an extension of California’s three year drought.

October 2014

Yesterday it was reported that California handlers shipped 163.0 million lbs in September, down 8.0% from shipments of 177.1 million lbs a year ago. Domestic shipments lagged by 2.3%, while exports were off 10.2% from last September. Very strong shipments to India (up 40%) were more than offset by weakness in China (off 38%), South Korea (off 35%), Turkey (down 49%) and Spain (down 14%).

Crop receipts added 594 million lbs in September to total 939.5 million lbs, well ahead of end September a year ago of 790.4 million lbs. This reflects the early crop and additional industry hulling capacity. I don’t believe anyone knows what this means in terms of the final crop. Moderate market observers are expecting a final crop somewhere between 1850 and 1950 million lbs, well off the NASS estimate of 2.100 million. Kernels have been dry and light. Although there is more shrivel than usual, quality in general has been good, with serious damage running just slightly above last season’s levels.

In thin trading prices moved higher for the first few weeks of September, but have finally begun to settle over the past couple weeks. With the higher prices more plentiful offers have begun to emerge. It appears now that prices have made their big push are starting to look more comfortable.

There is nothing in this report or in California that would suggest another jump higher. Year–to-date shipments are now 6.3% off versus last year with a daunting comparison coming in October. The strong Indian number showing another 600 plus containers on the water was baked into the pie in August at mostly lower prices and will be bearish in the short-term. While low commitment numbers reflect a paucity of offers, at the same time they mirror buyer hesitation. A majority of recent business has been concluded by buyers that have had very little choice but to bite the bullet and typically on reduced volume. Retail programs nervously wait to gauge consumer at higher prices.

While upside potential now looking limited, most in California anticipate an increase in call pool activity, while seasonal pools will continue to cautiously average in. The next month will be a test of seller resolve, which is always easy on the way up. However as long as the 2014 crop remains somewhat uncertain and skies remain blue in California any pullback is expected to be limited. Handlers are expected to be content to enter the first quarter less sold than usual as they hedge against the potential for a short 2015 crop.

September 2014

Yesterday the monthly shipment report was released and shipments of almonds from California handlers totaled 141.6 million lbs in August, down 4.2% from shipments of 147.9 million lbs in August a year ago. Domestic shipments were up slightly (1%) at 51.1 million lbs. Total export shipments were off nearly 7%

Facilitating the early inshell shipments, the crop is coming in faster and sooner than usual. August receipts totals 345.2 million lbs, up about 100 million lbs from last August totals. Nonpareil accounts for 313 million lbs of the total and by now it is clear that the nonpareil crop will not reach expectations. So far, pollinator yields are not seeing similar weakness, but at the same time are not making up for nonpareil shortfalls. At this stage the NASS forecast of 2100 million lbs is looking unattainable.

Almond prices have exploded over the month with prices gapping higher in a supposed vacuum of offers. A strong inshell premium has dragged kernel prices higher. Manufactured pricing has seen similar gains.

The fast moving market has been difficult for both buyers and sellers to navigate. On the selling side, there is genuine concern for the size of the 2014 crop along with the overhanging uncertainty of whether this crop will be needed to supplement 2015 supplies should rains not materialize this winter. Call pool growers have been trained to wait for higher prices and they can afford to be patient. Seasonal pools, in an increasingly competitive environment, cannot take the risk of high volume sales when their neighbor is waiting on the sidelines for higher prices.

As usual shipment numbers will be closely watched over the next couple months, but any weakness will be rationalized by sellers who will continue to point to the potential for a short crop and drought extending another year. Unfortunately the answer to both crop size and winter weather will not be known until January or February next year.

We are in uncharted territory for almonds, but with other tree nuts already there or higher, it may be the new normal for a while.

August 2014

As reported on the 12th, California almond handlers shipped 132.5 million lbs in July, down 12.3% from shipments of 151.2 million pounds in July 2013. Bear in mind that shippers pushed exports earlier in June to avoid a potential port strike in July (which never materialized). Consequently exports in July were down 21% and domestic shipments continuing strongly at 4.5% up.

The July shipment figure puts the cap on the 2013 crop year, with shipments totaling 1937.4 million lbs, up 3.8% versus shipments of 1866.4 million lbs for the 2012 crop year. Carryover into 2014 is calculated at 346 million lbs, up from 317 million last year. The 2013 shipping season will remembered as the year in which anticipated declines in Chinese and Indian demand due to higher pricing did indeed materialize, but were more than offset by continued strength in domestic demand (up 9%) and somewhat surprising gains in Western Europe (up 14%) and the Middle East (up 19%). California sellers emerge from the season confident in their ability to sell the crop at historically high prices.

In the field the harvest has started, with the first deliveries dribbling into hullers early last week and now gaining momentum. Early fields are usually stressed and not a good indicator of the crop. We hear mixed reports around the valley and so far little get excited about either way. With nonpareil coming off a record 810 million lb crop last year we would expect a slight decline this year. It is too early to prognosticate on the 2100 million forecast.

With sellers confident and buyers wary but resigned, almond prices have been stable over the past month. Due to seller confidence, buyers have been forced into less covered positions than normal. This exacerbates the potential for any surprise in market fundamentals to move prices over the next few weeks. With California sellers in control the most likely move will be to the upside as bearish news is downplayed and bullish developments will be played to full advantage. Consequently, the shipment report will come as a bit of a relief to buyers who have been hit by a barrage of successive records over the past several months. Focus will continue on early crop yields. Against a backdrop of drought and deficit irrigation most observers are seeing 2100 million as the upper end of possibilities. A crop close to this level will be needed to supply growing worldwide demand and we will likely not see a return to normal liquidity until sellers feel more confident that the crop is there.

July 2014

Objective Measurement Report Released

The USDA released the 2014 Objective Measurement today estimating the crop California almond crop at 2.1 billion pounds up about 100 million pounds or an increase of 4.5% from the 2013 crop. The Nonpareil crop is estimated at 800 million pounds down 1% from last year.

Qualitative observations made by NASS state the kernel weight of all varieties average 1.45 grams, which is up 6.6% with the width and thickness being slightly better than last year.

The nut set was the only surprise in the estimate with the total nuts per tree down 0.6%. NASS reported the nut set is -26% lower in the north, Sacramento Valley, and up 4% in the San Joaquin Valley as compared to last year.

Lastly NASS observed pest and insect pressure to be light and the crop appears to be 7 to 10 days earlier than last year.

Given a carry-in of 307 million pounds total supply for 2014 crop year is up 87 million pounds or 4% providing ample inventory to supply continue growth the Almond industry has experienced in most markets

June 2014

The monthly shipment numbers were released today and as most had anticipated, California shipped strongly in May, with shipments of 143.7 million pounds, a 9.2% increase over shipments of 131.6 million in May a year ago. Of the more than 12 million pound increase for the month, 8.5 million pounds can be attributed to stronger Spanish imports and 2.3 million lbs increase to the Middle East. California also shipped strongly into India (up 1.1 million lbs) and South Korea (up 0.9 million lbs). Chinese shipments were off by 29% (1.1 million lbs). Domestic shipments were only slightly up (0.5%) at 54.6 million lbs, but still a record for May. Year to date shipments of 1652.0 million pounds are now up 4.7% versus last year.

Since last shipment report we have seen a continuation of a firming market, initiated after the Subjective Estimate at the beginning of May. The INC gathering in Melbourne, reminded already confident sellers of high prices for competing tree nuts, particularly for freeze hit hazelnuts, and further reinforced water concerns in California.

Today’s report plays into the hands of California packers. California is less sold than usual, with the vast majority willing to bear the risk of a higher Objective number. However, with the exception of the Chinese number, there is little in this report to coax sellers to loosen their grip over the next few weeks. Demand appears to be steadily on course. June will likely be a big number as well, with many importers pulling early ahead of a potential port strike in July. With the crop looking to be a little early, August numbers will also be helped. On the supply side, although development looks good so far, the risk of quality and quantity problems due to deficit irrigation continue to loom. An upside surprise from the Objective may result in a mild price correction, but this will likely be seen as buying opportunity from buyers who are correspondingly less covered than usual. Patient sellers have been rewarded over the past several seasons and will likely exercise restraint again.

May 2014

NASS (National Agricultural Statistics Service) has put the 2014 crop Subjective Estimate at 1950 million lbs.   This number is calculated after a telephone survey of almond growers comparing their 2014 projections versus last year’s actuals.  The crop is estimated to be down 2.5% versus last year, while the average yield per acre is estimated to be down 4.9%

Over the past several years we have seen the NASS estimates land with varying accuracy – tabled below.   Last year the Subjective was laser-like, in 2011 it missed by nearly 13%.  

We note also that last week the acreage report was released.  The increase of 20,000 bearing acres for 2014 was no big surprise.  However, of notice was the upward adjustment of bearing acres for the past six years by 30,000 to 40,000 acres for each year.   So for example, last season, the 2013 bearing acreage was previously estimated at 810,000 acres, but now at 840,000 acres.   The increase of 20,000 bearing acres puts the estimated 2014 bearing acres at 860,000.  

As the historical crop numbers are fixed, the net effect of this retroactive change is to reduce the historical average yield numbers.  For example, no longer are we pointing to the 2011 record yield at 2650 lbs per acre  (2020 million lbs on 760,000 acres), but a reduced figure of 2525 lbs per acre (2020 million lbs on 800,000 acres).  This is salient when considering the 2014 estimate based on 860,000 acres – and the inferred yield of 2267 lbs per acres.

Crop

Subjective Estimate (Million lbs)

Objective Estimate (Million lbs)

Final Crop (Million lbs)

Bearing Acres (1000’s)

Yield 

(lbs /acre)

Previously Reported  Bearing Acres

2008

1460

1500

1614

710

2273

680

2009

1450

1350

1406

750

1875

720

2010

1530

1650

1628

770

2114

740

2011

1750

1950

2020

800

2525

760

2012

2000

2100

1878

820

2290

790

2013

2000

1850

2003*

840

2385

810

2014

1950

 

 

860

2267**

 

*2013 crop receipts to date – not final yet, but very close….

**Forecasted yield based on 2014 subjective estimate

Our sense is that the market was expecting an estimate between 2000 and 2050 million lbs.   A forecast for a lower crop versus last year leaves no room for growth in shipments.  Against a backdrop of strong consumption, particularly in developed markets, this will likely create a firm pricing environment for 2014 crop over the next few months. 

The Objective estimate will be released on June 30th.

April 2014

Yesterday the monthly shipment numbers were reported.

Shipments from California totaled 151.3 million pounds in March, up 7.6%
from shipments of 140.6 million pounds in March a year ago. Strong
shipments were seen to the domestic market (up 9.2%), Western Europe (up
8.1%) Middle East (up 67.8%) and India (up 34.7%). Chinese shipments
continue lackluster and were down 41.0% in March.

Season to date shipments of 1370.6 million pounds are now 4.1% (about 54
million lbs) ahead of last year's pace. This is of interesting note when we
consider that for the season China is off by more than 57 million pounds and
India is off by more than 26 million.

Another 13.2 million pounds of receipts were added in March, with the 2013
season total now at 2,003.5 million lbs.
Commitments dipped slightly in March to 353.2 million lbs. The change
suggest decent sales of just over 116 million pounds for the month. The
California shipped and sold position is very similar to a year ago (about
89% as percentage of the crop, or 75% as percentage of total supply).

Prices over the past month have drifted lower. When looking at why, one can
see that it was because of the combination of an uninspiring February
shipping report (down 6.7%) and growing confidence for a decent 2014 crop.
Crop expectations were recently further reinforced by an influential trader
forecast inking their guess at 2000 million pounds. We have read this
"independent" report and believe when you boil it down and look at it you
can see that for at least the last 2-3 years, the Trader has pretty much
looking at the average per acre production for the last 5-6 years and making
a very slight adjustment depending on whether they think it will be above
the average or below the average. As such, they have been relatively close
the last couple of years because the crops have been neither spectacular nor
horrible. This year is not exception; it looks neither spectacular nor
horrible so their calculation is probably reasonable as they don't need to
adjust upwards or downwards in by any significant amount.

There are a few surprises in this month's shipment report. California will
be relieved that shipments did not continue the weakness seen in February.
For all the talk of the "quiet market", the commitment figure and inferred
sales of 116 million lbs will also reassure sellers. However, it is not
anticipated that this will be enough to spark a rebound in pricing. The
overall picture remains one of sufficient seller inventories to get through
to new crop. Meanwhile new crop pricing is starting at significantly higher
levels than a year ago. Most buyers will continue to work hand to mouth
until shipments prove that these levels are appropriate to move what looks
to be a record overall supply in 2014.

Nevertheless we caution one in their approach as the one caveat is, what
impact will the water situation have? Frankly, no one knows., but it is
believe that there will be some losses, how many and to what extent is what
we are going to find out once harvest begins.

March 2014

The monthly shipment numbers were released today. Almond shipments from
California totaled 149.3 million pounds in February, down 6.7% versus
shipments of 160.0 million pounds in February a year ago. Domestic
shipments were up over 26% at 54.5 million pounds. Exports, however were
sharply off (down 19% at 94.9 million pounds). Pronounced weakness was
seen in China (down 74%), India (down 34%), the Middle East(down 21%) and
Eastern Europe (down 53%). Shipments to Western Europe were up 3%, which
is a slow-down from the last several months, but still an indication of
strong demand in an important established market for California.
Crop receipts, now becoming less of a factor, slowed severely and increased
by only 9.1 million pounds to 1,990.2 million pounds. This is the lowest
February number since the 2006 season. One can assume that the 2013 crop is
now just about in and that 2,000 million pounds will be a reasonable number
to use going forward.

Looking ahead it appears that the bloom went as well as could be expected.
All growing regions enjoyed mild conditions resulting in an extended bloom
with ample overlap and bee hours. There were some rain events towards the
end of the bloom, but not enough to impact pollination potential and
welcomed by the drought stricken state. Post bloom we have seen a
continuation of mild conditions which usually results in a good set. The
water supply situation has improved slightly over the past month, but not
enough to alter the grim outlook for growers relying on state and federal
water supplies. Most believe that California should be able to produce
another 2 billion pound crop in 2014.

Prices over the past month have been sporadic and weakened somewhat as
favorable bloom conditions have encouraged buyers to postpone purchase
decisions. Slower sales resulted in a sharp drop in the commitment numbers
from 448.5 million pounds at the end of January to 387.8 million pounds with
this report.

Buyers and sellers now will focus on a few key questions. What will
shipments do over the next few months and is there enough 2013 supply to get
them through to new crop? What is the outlook for 2014 crop.

Although domestic and western European demand are providing a solid
foundation to worldwide demand, California continues to need developing
markets. Shipment patterns over the past months are clearly showing that key
developing markets have reduced appetites at higher prices. It is unlikely
without a softening of prices that over the next several months California
will ship at significantly higher rate than a year ago. Assuming March
through July shipments at same pace as last year California they will have a
carry-over of just under 370 million pounds. This should be sufficient and
unlikely to cause a squeeze on current crop pricing.
Looking ahead, some are putting new crop close to 2 billion pounds potential
which would put 2014 total supply 2.33 billion (2% loss), about 60 million
pounds more than 2013 supply. Over the next few months crop forecasters
will aim their respective darts. Water supplies continue to play a critical
role in this calculation. However, for now, the market appears to be well
developed.

February 2014

Almond shipments in January totaled 160.2 million lbs, up 2.4% from
shipments of 156.5 million lbs a year ago. Year to date shipments of
1070.0 million lbs are now 4.6% ahead of last year's pace.

With pricing sharply higher than a year ago, it is not surprising to see
some markets coping better than others. Domestic shipments continue to
provide a solid anchor to worldwide demand. There was some expectation
European shipments would slow in January, but the figures show continued
offtake. Even accounting for the additional 24 million lbs that Spain has
taken this year to make up for their short crop, there is still a strong
case for increased per capita consumption. Meanwhile, the Chinese and
Indian markets continue to be quiet.

Crop receipts were reported at 1981.2 million lbs, swelling by 45.6 million
lbs in January. There is still more to come. Last year another 45 million
lbs trickled in after February and the 2013 crop will certainly end north of
2 billion lbs. Looks like the May Subjective Estimate of 2 billion lb was
on target this time around, with subsequent crop forecast reductions
providing the head fake.

Commitments, which usually start declining at this stage of the season,
actually increased by 20 million lbs to 448.5 million lbs. Adding good
sales in January to the decent shipment number and the California position
remains confident. About 78.5% of the 2 billion lb crop is now sold - about
even with the position a year ago.

Activity over the past ten days has slowed and prices have steadied at these
levels. Buyers, having booked their urgent needs, now appear more willing
to wait as sellers emerge and a series of storms over the northern part of
the state takes the edge off drought panic. Weather will continue to play
a key roll over the next couple months. Recent storms do little to change
the outlook for a reduced water supplies. It is now too late to accumulate
the snowpack that California desperately needs. However, the door does look
open for additional northern moisture over the next ten days.

At the same time, the bloom is upon us. Orchards in the south are showing
mixed progression. Conditions in the south are forecast to be generally
mild over the next week, which should be conducive to bloom progression and
pollination. Bud set is seen as decent. The water issue is long and
complicated, but for the purposes of this short update we anticipate that
growers in most areas will have sufficient supply to set and grow, all be it
a less than optimal, 2014 crop.

At this point most believe that the new 2014 crop potential will be close to
2 billion lbs and California will need it to satisfy demand. Consequently,
unless there is bloom weather surprise, most feel that pricing will likely
find itself comfortable at current levels over the next few weeks.

January 2014

California shipments for the month of December were down 1% from shipments
December 2012. Year to date shipments now stand at 909 million pounds up 6%
over the same period last year. Breaking it down, domestic shipments set a
new record at 47.1 million pounds up 20.4% and are sitting at 265.47 million
pounds up 10.6 % over last year. Export shipments were 110.4 million pounds
down 8% with year to date shipments increasing to 619 million pounds up
3.95% over last year.

Intriguing is the strength of commitments soaring 14% over last year with
domestic and export up 5% and 24% respectively. As mentioned as being a
possibility in the past, the crop receipts surpassed the NASS estimate of
1.85 billion pounds as Deliveries as of December 31st totaled 1.935 billion
pounds. The projected 2013 crop using historical receipt data for January -
June deliveries would suggest a final crop between 1.97 billion and 2 .00
billon pounds.

The one FYI that is driving this market that is not reported on is the
Californian rainfall totals. California is in the grip of the worst drought
in over 30 years. The rainfall in California for the calendar year 2013 was
the lowest on record. December was the hottest and driest since records have
been kept and January is shaping up to have similar results. Concerns over
the lack of water are equally match by the fear of rains during the bloom
period, which is only a month away. Fear is a market driver and we have
seen the California almond market start approaching record highs across the
board.

December 2013

California shippers enjoyed another busy month in November. Shipments of
198.4 million pounds are up nearly 8% compared to shipments of 184.0 million
a year ago. Hullers are slowing, with 352 million of receipts were reported
in November, down from 594 million pounds in October. Total receipts stand
at 1,737 million pounds. Nonpareil accounts for 714 million pounds of the
total (already well beyond the NASS forecast of 650 million pounds). Last
season another 307 million pounds came in after November. The 2013 crop
has come in dry and with generally good quality, with few reasons to impede
progress other than vanishing stockpiles. Another 300 million pounds this
season might be a little optimistic as hullers will end earlier.
Nevertheless, setting sights on another 250 million pounds does not seen
unreasonable, which would put the final crop in the 1950 to 2000 million
pound range.

Relatively high prices are now being generally accepted by buyers and we
have seen a relatively stable market over the past month with decent volumes
getting done. Year to date shipments are now 7.4% (nearly 52 million
pounds) ahead of last season. Unless the crop has a surprise in the tail,
this pace cannot be sustained. Well sold California will be in no rush.
Another dry winter should reward sellers, while the downside should rains
materialize is limited against a backdrop of strong demand in established
markets. At the same time it is difficult to expect a strong recovery in
Chinese and Indian demand at these price levels and without significant
changes in supply expectations we can expect prices to remain stable over
the next months.

November 2013

As reported this past Friday, California almond handlers shipped a record
228.6 million pounds in October, surpassing the previous record set last
October of 221.0 million pounds. Season to date shipments now total 553.6
million pounds, 7.2% ahead of last year's pace. With most handlers
reporting a busy month, strong overall shipments were expected.

The crop continues to come in at a record pace. Receipts through the end
of October totaled 1385.2 million pounds, more than 146 million pounds ahead
of receipts at the same time a year ago. Nonpareil variety accounts for
621.8 million pounds of the total and looks set to surpass the NASS NP
forecast of 650 million pounds. At this point the number that seems to be
being talked about is that at least the 1850 million pound forecast will be
achieved.

Almond prices have been firm and relatively steady over the past month. The
strong shipping number in September kept seller confidence high despite talk
of Chinese reselling, a lackluster Indian market and importer warnings that
higher prices were not yet accepted and retail demand was certain to suffer.

It is hard to find weakness in Fridays report. Shipments and demand
continue to be the key driver and there is not enough supply to maintain the
current pace of shipments. California is well sold and the next months
will likely see a continuation of disciplined offers. It is believed that
January forward buyer cover is relatively thin. That the crop is coming in
well would be the only reason not to ratchet higher.

October 2013

The shipment numbers have just been released, and California shipped a
record 177.1 million pounds of almonds in September, up 13.6% from shipments
of 155.8 million pounds in September a year ago. Shipments for the first
two months of the season are now running 10% ahead of last year's pace.
Somewhat surprising are shipments into China at 32.3 million pounds (up
30%), where higher prices do not seem to yet be slowing down sales.

The crop is being processed at a record pace. Receipts in September
totaled 542.5 million pounds bringing the total for the season to 790.3
million pounds. Still too early to relate hulling speed to the
overwhelming question of crop size. One bright light is that Nonpareil
yields are better than forecast but its a mixed bag. Generally speaking
they are seeing higher amongst growers in the southeast end of the valley,
but hearing many disappointing reports from west side and further north.

At 555.3 million pounds of commitments the industry is now sold and shipped
at close to 48% of the anticipated crop. This compares to around 42% at the
same time a year ago.

Reflecting strong shipments and California's relatively well sold position
prices have edged steadily higher over the past month. Offers have been
relatively scarce, and buyers have been forced to shop around in order to
secure tonnage. Premiums for size are strong, and Nonpareil prices are
exhibiting similar tendencies. Manufactured almonds are now being offered
based on size of input.

However one tries to analyze it, today's numbers are more positive news for
sellers than buyers. Most can anticipate the market will move higher on
today's report. Focus now shifts to the increasingly important October
shipment number (221 million pounds a year ago) and whether the pollinator
crop will support what is proving to be strong demand.

August 2013

The 2013/14 season is off to a fast start. The crop is coming in at a very
quick pace, while August shipments are likewise setting records.

California shipped a record 147.9 million pounds in August, up 5.9% versus
shipment of 139.6 million pounds in August a year ago. With exception of
Japan and South Korea who had pulled strongly earlier in the summer, all
major markets performed well. Shipments to China were up 43% at 17.6
million pounds. Western Europe shipments were up 10% and the Mid East up by
31%. India fared better than anticipated at 7.5 million pounds (up 7%).
Domestic shipments continue to underpin global demand, posting a 4.9% gain
to 50.6 million pounds. At this stage of the season August shipments were
a mixture of old and new crop and also likely representing product bought at
a wide range of prices given recent market movement.

Sales commitments of new crop are reported at 498.1 million pounds, up from
412.1 million pounds a year ago. This is a relatively strong position.
Adding August shipments and the commitment number, just over 30% over the
total supply is now committed. Over the past decade this number has ranged
from 25% to 32%. Last year at this time the industry was only 25% sold.

Nonpareil yields in the south part of the valley are generally a little
higher than last year, particularly on the younger orchards. Sizes of nuts
are small with few 23/25 NP kernels being generated. Early receipts of
Butte and Padre are also showing very small kernels.

As usual, the numbers are a double edged sword. Strong shipments will be
welcomed by sellers. Buyers will point to strong shipments bolstering
inventories and reduced need purchase in the short-term. This is
particularly true in China and India where buyers may now have a little more
time to monitor crop progress - which has been the driving factor on recent
weakness. If indeed the crop is going to be near 1850 million lbs then
prices may have already corrected sufficiently. California sellers will
most likely be patient, but with a small kernels to move and prices still
near five year highs it is unlikely this will be the case.

July 2013

The monthly shipment report for the California Almond industry is out today.

California shipped 137.3 million pounds of almonds in June, down 2.9% from
June shipment of 141.3 million pounds a year ago. In what is becoming a
familiar story, domestic shipment were up (3.3%) while exports fell short
(6.2%) versus last June. Domestic shipments for the year to date are now up
7.1% while exports are lagging by 7.7%.

The main driver in the market over the past ten days has of course been the
Objective Estimate of 1850 million pounds. The number was lower than
expected and prices jumped higher last week. Buyer reaction has ranged
from skepticism to resignation. The report showed small sizing and a short
nonpareil crop. Trading picked up this week as prompt buyers capitulated
and nonpareil buyers hedged new crop needs. Field reports of heavy insect
and mite pressure coupled with high heat have added to concerns. Prices have
jumped between 25 to 40 cents per lb depending on the item, while current
and new crop levels are now almost at parity.

With the 2013 supply in front of us at around 340 million lbs carry-in and
an 1850 million lb crop, the situation is almost identical to last year with
a 335 million lb carry-in and a crop at 1885 million lbs. Pricing however,
is about 80 cents to $1.00 per lb higher than this same time a year ago.
Can California maintain shipment levels at these prices? Since this past
March, shipments have lagged, particularly to price sensitive and trader
oriented markets. While their may be further rationalizing of premiums for
Nonpareil and large sizes, most anticipate that buyers will be cautious.
Shipments will likely need to prove themselves before prices head much
higher from these levels.

OBJECTIVE ESTIMATE

Yesterday, the USDA released the 2013 Objective Measurement estimating the
2013 California almond crop at 1.85 billion pounds down 30 million pounds or 2%
from the 2012 crop. The Nonpareil crop is estimated at 651 million pounds down
30 million pounds from last year. Put another way the 2013 crop is identical in
size to 2012.

Other qualitative observations made by NASS included the average kernel
weight of all varieties of 1.36 grams which is the lowest in 40 years. Not
surprising the sizing of the kernels is small in both length and width. Comments
from the samplers also suggested higher than normal insect pressure and they
are projecting an early than normal harvest.

The 2012 crop year marks the first time in over 2 decades where shipments
did not grow when there was available supply. The old axiom that we ship what
we grow will not be realized as the industry is forecasted to ship roughly 3%
less than 2011, 1.839 as compared to 1.899 billion pounds.

Recapping the 2012 crop demand to date, its the tale of two markets moving
equally but completely opposite directions. Domestic consumption continued its
growth bolstered by new product introductions, excellent health messaging and
competitive pricing as compared to other tree nuts. Shipments YTD are up 34
million pounds or 7.5%. Export shipments are down 93 million lbs. or -7.87% with
the decline attributed primarily to the emerging markets. Shipments to China and
Middle East are down 14% and 29% respectively for a total drop of 89 million
pounds. Sales particularly declined in Spain where year to date shipments are
down 13 million pounds or 10%.

The 2012 crop provides valuable insights into consumption price points. Clearly
importers and consumers in price sensitive markets abstained from the market
seeing little demand after the January/February price escalation. Total shipments
for the last 3 months from California are down 14% as compared to last year.

Looking to the future the industry is faced with a supply situation of roughly
50 million pounds less than last year. The majority of the shortfall is primarily
in the Nonpareil variety.

Prior to the estimate it appeared that current crop might drop to new crop levels.
It would now appear new crop will appreciate to current crop levels or beyond.
While we have a better understanding of the optimum trading band it is still
unclear the impact on demand when trading at the higher end or above the
trading band for a prolonged period of time.

June 2013

The monthly California almond shipment report reported for May a total of
131.6 million pounds, down 9.5% versus shipments of 145.4 million pounds a
year ago. Extending the scenario seen over the past couple months, domestic
shipments were ahead of last year's pace, while exports have lagged (down
16% for May). With California sellers earlier pointing to brisk sales in April that
were supposed to translate into strong May shipments the number is seen as
slightly off the mark. Season to date shipments now stand at 1,578.0
million pounds, about 3.6% behind cumulative shipments at the same time a
year ago.

Since last month prices have seesawed within a 10 cent range. Most
recently prices have firmed over the past week or so amidst active buying
interest. With the current versus new crop differential narrowing to about
20 to 30 cents per lb we are seeing premiums being achieved for early
shipments.

In the near-term one might expect current crop to be a little sloppy.
Sellers who had been waiting for a stronger May number may emerge. With new
crop still at a discount to current there are few reasons to delay finishing
up the 2012 sales. New crop will likely be relatively unscathed as prices
hold. That said, California continues to wait for a pick-up in Chinese
interest. The outlook for the Indian market is reported as brightening;
with lower than expected inshell imports this past month. Underlying demand
remains the key long-term driver and most believe the patient California
sellers will likely be rewarded.

May 2013

The monthly shipment report was released today and California shipped 129.5
million pounds of almonds in April, down 12.8% from shipments of 148.5
million a year ago. Domestic shipments were up by nearly 13% to 51.3
million pounds, but exports at 78.2 million pounds were sharply weaker with
very few bright spots.

The Subjective Estimate was released last week forecasting the 2013 crop at
2.00 billion pounds. The market was uninspired by the news. A few weeks
earlier new crop had already been slated by a California exporter report at
1.96 billion. The Subjective seemed to confirm the outlook. Current crop got
a bump out of the new crop forecasts, but subsequently slipping back as
sellers emerged and buyers remained reticent.

California sellers can be encouraged by the 353.6 million lb of uncommitted
inventory and by sales of approximately 161 million lbs in April. There is
not much left to sell in the next three months. Today's report will likely
impact current crop pricing. Looking forward one might anticipate some
interest in world markets. For new crop pricing, not much is expected to
change in offers. Current crop is priced with a 2.0 billion or slightly
larger crop in mind. Similar pricing worked well a year ago for a crop that
was anticipated at about the same size.

We expect California sellers to be patient in this regard.

The Subjective Almond Report Released Early May 2013

The initial subjective forecast for the 2013 California almond production
released today is 2.00 billion pounds.

This is the exact same Subject Estimate as last May 2012, which was also at
2.00 billion pounds, but 6 percent above last year's actual production of
1.89 billion pounds.

April 2013

The March California almond shipment number was released today at 140.6
million pounds. Last March California shipped 172.5 million pounds as China,
India and Middle East all pulled strongly. This year these markets are
noticeably less active, with traders backing away from falling prices. In
total these three markets are down 30.7 million pounds compared to a year
ago, about the shortfall in total shipments for March. Markets less
dominated by traders have seen more steady performance. Domestic shipments,
along with Japan and South Korea continue to post shipment increases. Year
to date shipments now stand at 1316.9 million pounds, down 2.0% versus
shipments a year ago.

Sales activity was also relatively slow in March. Reported commitments
dropped by 46 million pounds to 327 million pounds - inferring new sales of
around 95 million.

Pricing pressure has been primarily driven by expectations for a good 2013
crop. Eyeing the new crop discount, current crop buyers are deferring
purchases in anticipation of current crop gliding down to new crop levels.

The key to the market over the next several weeks will be the developing
consensus on new crop size. The first of several influential forecasts will
likely be seen at the end of this week. While there has been positive news
for pollinators and hardshell varieties, concerns for nonpareil continue to
circulate. While new crop nonpareil pricing reflect the supply concern, new
crop pollinator pricing is close to levels traded a year ago. Buyers will
do well to remember that these prices worked effectively to set up strong
shipments and generally rising market for the 2012 season.

March 2013

Following brisk January sales, California reported this past Friday that
they shipped a record 160.0 million pounds of almonds in February. This is
up over 10 million pounds versus the previous February record of 149.9
million pounds posted a year ago. Chinese shipments were off a sharp 8.6
million lbs. Several key countries, however, picked up the pace to more
than make up the difference, including United Arab Emirates, India, South
Korea, Russia, all while US domestic shipments were 4.4 million pounds ahead
of last February's pace.

Almond prices fell in February, dropping about as fast as they rose in
January. After the January position report offered scant reason for further
price increases, mother nature provided nearly ideal bloom conditions.
Sellers who had been holding out came out to find buyers no longer there.
California support at the lower end is reported to be limited, but bid
levels have been consistently low. Activity has been light and the market
disoriented.

The good weather effect is now completely in the market. Market swings seem
to get overdone on the way up and also on the way down. Weather and
supportive numbers will encourage buyers to return. There is not much
current crop left to sell (around 300 million pounds) and five months before
new crop nonpareil become available.

February 2013

On Friday it was reported that California shipped 156.5 million pounds of
almonds in January, slightly more than the 153.7 million pounds shipped in
January a year ago. The continued growth in shipments were seen in the
domestic market (up 17%), Middle East (up 58%) and India (up 95%). Chinese
shipments were weak (down 68%).

Crop receipts added another 98.4 million pounds last month to bring the
combined total to 1839.5 million pounds. So while the season still looks to
be shy of 1900 million pounds, most crop expectations will now likely be
revised a little higher.

Reflecting an active market in January, commitments are reported at 420
million pounds, up from 376 million pounds at the end of December. The
numbers suggest sales of around 200 million pounds, with confident sellers
doing much of the business for nearby positions.

Following last month's position report which confirmed supply problems,
uncovered buyers came out in force. Prices were pushed higher on a daily
basis for nearly three weeks, with most items adding about 50 cents per lb.

Bloom has yet to start. Growers saying that cold weather will delay bloom
by about a week. While important, bloom weather is not expected to have a
lasting effect on current crop pricing. With 7 months still to go, the
tight current crop supply situation is clear to all. Anticipating good
conditions, it is reported that new crop is currently being thinly traded at
about a 40 cent discount to current crop.

Friday's report should help to steady things. Shipments are good, but not
as strong as feared. The receipt number, although not critical at this
point, adds a little comfort to supply expectations. Huge shipments to India
will dampen enthusiasm there for the time being. Flat European buyers are
now more covered and less eager to follow further gains. Meanwhile, more
sellers have emerged over the past couple weeks to take advantage. Key to
the market will be Chinese reaction after their New Year. Having earlier
bought enough for the holiday period they have been quiet over the past
month. It is anticipated that Chinese pipelines will be relatively empty
when they return in a couple weeks, but how they will handle sharply higher
prices is unpredictable.

December 2012

The Almond industry shipped what most packers in California will call a
disappointing 184.0 million lbs of almonds in November. Certainly we heard
the hyp expectations would be closer to last November's total of 213
million. Sellers will be hard pushed to find many bright spots in the
numbers, although domestic shipments were stronger as compared to total
export numbers.

Year to date shipments now down 1.4% at 700.5 million lbs.

Over the past month we have seen a very confident California and prices
nudging up. While overall volume has been relatively light though as there
are still buyers that have resisted. It is classic stare down, which last
month after a very strong shipment number favored sellers. Now the balance
has shifted. Yes, Europe is under covered and will need to buy. Yes,
Chinese demand will continue. But for the at least the next month talk will
be more in terms of how much is needed to be sold.

The crop will be better known at the beginning of January. However, until
then with no reason to go higher we can be sure to expect some pricing
pressure over the next weeks but most likely will remain limited against a
backdrop of a smaller than had hoped crop with limited production potential
for the 2013 season.

November 2012

The monthly shipment report is out and California shipped an all-time record
221.0 million pounds of almonds in October, just past the previous record of
219.5 million pounds posted in October a year ago. Strong results in
domestic and Asia Pacific shipments offset losses in Europe and the Middle
East. Domestic shipment increased by 18 % to 61.1 million pounds.
Shipments to China were up 14% to 50.9 million pounds, while India also
gained 17% to 12.67 million. European shipments were off 15% and the Middle
East took 29% fewer almonds than a year ago. Season to date shipments now
stand at 516.5 million pounds - up 3.8% versus a year ago.

After climbing strongly since late August amidst concerns for a shorter than
expected crop, prices over the two to three weeks have slipped a bit as
buyers have backed away and more sellers have emerged. Inshell turned very
quiet, with Chinese and Indian buyers diminishing over the past few weeks.

There is still much business to be done. As a percentage of supply
California sales are further behind than usual (45% shipped and sold if you
put the crop at 1900 million pounds). At the same time buyers need to
cover. The latest shipment number further reinforces confidence in demand.
Until the crop is proven to be better than current pruned back expectations,
the cards seem to favor sellers.

October 2012

The shipment report was out yesterday for September and California shipped
155.9 million pounds, down 6.2% from shipments of 166.2 million pounds in
September a year ago.

Last year the crop was late with a skinny August and a rush in September
and October to fill pent-up demand. This season the harvest has been timely
with record August shipments, but subsequently sales were restricted as crop
yields have disappointed. Weaker domestic shipments (down 12%) and
shipments to India (down 23%) account for most of the gap.
Chinese shipments were relatively steady at 3% stronger than a year ago.

Harvest conditions have been ideally dry and warm. Record receipts of
535.3 million pounds were reported in September, bringing the season total
to 660.9 million pounds. Last year the end September total stood
at 500.0 million pounds. September receipt progress, however, is a
reflection of industry huller capacity and not crop size. At this point
the best look into crop size remains same field comparisons of yield -
which have consistently disappointed. A month ago it was pretty clear
that Nonpareil was not going to reach the NASS forecast. Pollinator
yields are now similarly causing concern. Theories abound, with the most
plausible pointing to hot weather in late June and July coupled with "tired"
trees after the record breaking 2011 crop.

There is now almost universal agreement that the 2100 million pound NASS
forecast is out of reach. The opinions range from 1700 million pounds to
1950 million pounds. The market is adjusting accordingly.

Crop uncertainty and the sharp jump in prices make a difficult environment
for both buyers and sellers. Not surprisingly, September commitment
numbers, totaling 503 million pounds, are lower than usual (about 36% sold
and shipped versus a typical 40% at this time of the year). With the market
now 40 cents higher than a month ago, we have seen more sellers emerge. On
the buying side the industry has seen more ready acceptance in the Asian
markets, while European activity has been relatively slow.
California can anticipate that shipments in October will be lower than a
year ago. They will have to be in order to accommodate smaller supply.

Crop size will be the key to future direction. Hullers are going to end
earlier than last year - in our area as much as a month earlier than last
year. Nevertheless industry tonnage will likely not be pinpointed until
December or early January. Until then we anticipate a nervous market and
stingy sellers. Then of course comes a critical bloom.

September 2012

For the first month of the new season, California Almond Shipments were
strong totaling a record 139.7 million pounds for August. Shipments last
August (constrained somewhat by a late crop) were 111.5 million pounds.
Shipments to Chinese destinations totaled 12.4 million pounds, almost double
what was shipped in August a year ago. Also of note are robust shipments
to Europe (up 22%), Middle East (up 18%).

With the harvest now well underway, news from the field has been cause for
concern. Nonpareil yields are now widely understood to be under
expectations. NASS had forecasted the NP crop at 730 million pounds, or
7% lower than the 2011 total. It now appears that this result might be more
likely to be closer to 15% to 20% lower than last year. Mark just
returned from California and what is being seen is dry and light kernels.
With the nonpareil crop likely short by 70 million pounds or more, all eyes
are on the later varieties to see if they can make up the difference.
Early results in our are not suggesting that this will be the case.
Although it is too early to argue against the usually reliable NASS
forecast, there is a growing crack in the argument for 2100 million pounds.
As a result of this news, market pricing has quickly adjusted with Nonpareil
prices being the most sensitive to production concerns with prices firming
about 10 to 15 cents per lb depending on size.

Strong shipments in August once again drown out buyer observations of slow
business and negate arguments that currency problems have dampened demand.
A few weeks back, the market did seem to be in the midst of a classic stare
down, particularly for the early inshell business. However, initial
nonpareil yields, forced the buyer's hands and California sellers have been
getting their prices. Both Chinese and Indian buying, key to overall
demand, have been noted but is still a bit unknown as to how much. Looking
forward, California can anticipate good demand at current prices and the
news from the field becomes increasingly important as the 2012 harvest
progresses.

July 2012

So with yesterdays report we learned that Shipments out of California totaled 141.3 million pounds in June, up 4.6% versus shipments of 135.0 million pounds in June last year.   The total was propped up by very strong domestic shipments (up 25.9% at 49.6 million pounds), while total export shipments were down 4.1% at 91.7 million pounds.   Strong June exports to China (up 30%) and South Korea (up 65%) and Japan (up 74%) were counterbalanced by a nearly 10 million pound drop in Spain (down 46%).

On June 29th, NASS forecast the 2012 crop at 2100 million pounds.  With bearing orchards at 780,000 acres the imputed yield is 2692 pounds per acre.   This would be the highest yield ever, even higher than last season's 2658 lbs per acre.   There was widespread expectation that the trees would need to rest after last year's record effort.  Apparently this is not the case, with the exception of a brief hiatus for the Nonpareil variety which is forecast at 730 million pounds after a 784 million pounds performance last season.

In the run-up to the Objective and then following the mild seller disappointment after the number, almond prices have slipped lower, but over the past week we have seen increasing interest and actual business getting done. 

It appears that the market has digested the crop forecast and is ready to move on.  Yesterday's shipment report reminds us that demand continues be the key to pricing and 141.3 million pounds is a decent result for June.   Shipments for the year are 14.2% higher versus last year.  Even with the robust forecast there is only enough supply to increase consumption by about 8% next season.  Almonds continue to be good value versus other tree nuts.   Concerns of worldwide economic problems need to be held in perspective against actual effect on almond consumption (note that Greece has actually increased imports by 3% and tsunami smitten Japan is up 11% for the year).   Almonds at affordable levels will continue to be in high demand as millions of emerging middle class consumers upgrade their diets.  Yes, prices, particularly for pollinators, are starting at about 15 to 20 cents higher than a year ago. 

Nevertheless, given the big picture one could argue that this seems reasonable and as a result most do not expect significant declines from these levels.

Objective Estimate Released June 29th, 2012

In May, the 2012 California Subjective Forecast was 2 billion pounds.

On Friday, California's 2012 Objective forecast was released at a record 2.10 billion meat pounds, up 5 percent from May's subjective forecast, and 3 percent above last year's crop. The forecast is based on 780 thousand bearing acres. Production for the Nonpareil variety is forecast at 730 million meat pounds, 7 percent below last year's deliveries. The Nonpareil variety represents 35 percent of California's total almond production.

June 2012

California packers shipped 145.4 million pounds of almonds in May, up 11.5% from shipments of 130.4 million pounds in May a year ago. This is a decent showing, but off the 15.1% pace of shipment growth that has been year-to-date.

Reflecting what could be perceived as relatively slower sales, commitments dropped to 305.5 million pounds. California nevertheless remains in a confident position with 88% of the 2011 supply sold and shipped.

Almond opinions at the INC (last month) were decidedly bullish this year in Singapore. And with good reasons; strong and growing demand, expensive competing tree nuts and supply fundamentals that suggest crops over the next few years will struggle to make big gains.

In the short-term we see sellers trying to finish off the last of the 2011 crop. New crop is trading at a slight discount to current crop and there really is no reason to delay. We also see a strong dollar discouraging immediate purchase decisions. Todays shipping report should have little effect. The 2011 crop story is in its final chapter and unlikely to have any surprises at the end. All eyes are now on the 2012 crop. Growing conditions have been favorable over the past month, mostly dominated by slightly cooler than normal temperatures which will help nut size development.

The Objective crop forecast will be released on June 29th. Expectations range between 1.9 to 2.2 billion pounds. From what most that we speak to can see, to a greater extent than usual both buyers and sellers are hinging their 2012 crop strategy around this number. With business deferred, the impact of a surprise has greater potential to move the market. However, it is important to note that against a back drop of strong almond demand, in our opinion, in the short term upside risk outweighs downside at this point.

May 2012

The April Shipment Numbers were released today and totaled 148.5 million pounds, up 17.5% from shipments of 126.4 million lbs in April a year ago. China shipments continue to underpin overall strength, totaling 9.5 million lbs (up 57%). Remarkably, the Middle East imported 21.0 million lbs in April, more than double those of a year ago. Strong shipments over the past several months to the Middle East now put the regions season to date imports at 29% higher than the year before. This is on par with increases in Asian shipments, which now stand at 30% higher than last year. Total shipments to all destinations now stand at 15.5% ahead of last season pace.

After the huge March shipments (172.5 million lbs) were reported a month ago, prices jumped higher. Unlike prices spurts over the past several months, however there was no pullback and we have since seen standards creep inexorably higher over the past few weeks.

The previous crop is known now at 2017 million pounds (adding another 5 million lbs since end March). New crop decks the trees, laden with promise. And we are all another season older. The 2012 crop Subjective Forecast was released a week ago at 2000 million lbs. At 780,000 bearing acres this is an average yield of 2560 lbs per acre, down about 100 lbs per acre from the record yield of 2650 lbs in 2011. Certainly California can market this easily enough and indeed the more appropriate question is whether it will be enough. With a carryover now forecast in the 250 to 300 million lb range, there is only enough projected supply to support a 5% to 7% growth in shipments. With shipments now increasing at a 15.5% pace, buyers will have to hope for a bigger number out of the Objective Forecast at the end of June if there is to be any price relief.

April 2012

This months shipment number of 172.5 million pounds for March surprised even optimistic observers today. This is up 32.3% from 130.4 million pounds shipped in March a year ago. Year to date shipment totals are now running 15.2% ahead of last year.
There had been some concern that shipments to China were going to start slowing down, but at 21.5 million pounds this is not yet showing up. Shipments to the Middle East contributed in a big way at 22.2 million lbs, up 221% for the month and after a slow start now up 22% for the year. Inshell shipments to India continued to flow strongly at nearly 8 million pounds. Shipments to Europe were up 20% for the month and are now up a solid 8% for the year.

Following last months strong report, the lower end of the market added another 10 cents. The market has seen Premiums for larger size Almonds while prices for Manufactured almonds have increased only about 5 cents higher than a month ago. New crop pricing, eyeing reports of a strong 2012 pollinator set, is discounted by about 10 to 15 cents per lb depending on the item.

At last month the feeling was that firm pricing would be needed to apply the necessary brakes and todays report reemphasizes this point. Although it is believed that their are big stocks in Chinese warehouses and Hong Kong resellers, worldwide demand continues to appear robust.

There is still buying to be done for current crop needs. The new crop looks promising, but not necessarily uniformly spectacular. California will need another season of record yields to satisfy demand growth at 10%, let alone the current pace of 15.2%.

March 2012

With February shipments reported today at 149.8 million pounds, the shape of current crop is pretty well formed. The numbers released today is nearly 30% higher than last February (115.6 million pounds) and brings the season to date total to 13.1% ahead of last years pace.

On the supply side the 2011 crop looks to be finishing without surprises. February receipts totaled 51.9 million pounds, bringing the total to 1966.3 million pounds. Commitment numbers at 421 million pounds will bolster seller confidence. Last year at the same time commitments were at 296 million. California is now close to 75% sold and shipped, compared to 70% at the same time a year ago.

The good news is that buyers can be relieved that bloom conditions for the 2012 crop have in general have been good. Warm and sunny weather in the second half of February coincided with good softshell bloom overlap and ample opportunity for pollination. There have been a couple cold fronts over the past 10 days during the second half of the hardshell bloom, but not enough to cause alarm.

Barring a freeze, which becomes less likely as the weeks advance, California should have a decent 2012 crop. Crop size arguments will abound. The top side parameters are bearing acres at about 770 thousand and average yield at 2650 lbs per acre (the record yield seen in 2011). This calculates out to just over 2 billion pounds. Not many can see much more.

The questions for now is; can shipments continue to surprise? Month on month comparisons will be less glowing over the next few months as California shipped very strongly last summer. But even if March to July shipments throttle back to last years levels, California will still end the year up 8.0%. A similar increase in the 2012 season will eat up all of potential supply under ideal conditions. If Chinese consumption continues to grow this is a conservative forecast.

The sense is that firm pricing will continue to be seen in order to apply the necessary brakes to slow things down.

February 2012

California almond shippers made up for what those in California perceived as a slightly disappointing December by shipping 153.7 million pounds in January. This is 28.3% more than last Januarys total of 119.8 million. Shipments for the season are now up by 11.0% versus last year.

Of mention is shipments to all European destinations (up nearly 6 million pounds), but the lead story is China, 25.4 million pounds (plus another 1.5 million if you include Vietnamese shipments). This compares to 3.9 million pounds in January a year ago. The Chinese total for the season is now at 166.8 million pounds, more than double the totals sent to the next most popular export destinations (Spain at 78.5 million and India at 74.3 million). Shipments to India in January were down by 1.2 million pounds (12%) in January.

Crop receipts are closing in on the NASS forecast of 1950 million and reached an end January total of 1914.4 million pounds. Last year another 85 million came in after January so it looks like a total near 2000 million will be likely.

Commitments are strong at 440.8 million pounds, nearly 100 million pounds more than a year ago. Notably, the commitments plus shipments today account for about 69% for the total supply out of California, this compares to 66% at the same time a year ago a very comfortable position for California sellers.

Strong demand for standards and California varieties, particularly from European buyers, pushed the bottom end of the market strongly higher over the past few weeks. It appeared that buyers were holding back their second half crop year needs and shipments were and still are needed for prompt use. This is certainly the case in Europe where pipelines are relative empty and buyers still need to make second quarter purchases. Dollar weakness is helping soften the impact of higher prices. Competing nut prices are helping too. China has been known to resell if prices are advantageous, but lions share will make it for internal consumption. The relatively low number for India can be explained by lack of inshell availability will be a positive for prices in the local market.

Bloom in California will start in a week or so and from what we can tell, market will remain strong right into it. Growers need both dry weather for pollination and rain to make up for an extremely dry season thus far. Todays bullish report adds additional pressure to the need for a good crop.

January 2012

Almond shipments in December were reported today at 157.2 million pounds, down slightly from shipments of 160.9 million pounds in December last year. The pace is slower than had been seen in the previous three months when shipments were strongly higher than the year before. Total shipments for the year are now 867.6 million pounds, up 8.4% versus a year ago.

On the supply side, the crop looks increasing likely to end near the NASS forecast of 1950 million pounds. Last month hullers delivered another 315.1 million pounds to processors, bringing the end December to 1757.3 million pounds. Of this total, 684.8 million pounds were reported as Nonpareil (forecast at 750 million pounds). Last year at this time total receipts stood at 1424.5 million pounds, 204 million pounds away from the final tally. Adding another 200 million pounds would bring this season to the NASS figure.

Over the past month buyers and sellers have enjoyed a steady market. The change in commitments suggests new sales of just over 100 million pounds, well under the pace of September and October. A stronger dollar (appreciating about 5% versus the Euro the past month) has not helped.

Buyers will most likely use todays shipment numbers to try push for a slightly easier level. California sellers will likely resist. Shipments plus commitments are now nearly 63% of total supply -- a relatively comfortable position for California. Although not a record, the December shipment is still a strong showing. Almonds continue to remain a relative bargain compared to other tree nuts. Chinese and Indian demand, key to consumption, appears to still be robust at these price levels. Bloom is coming in another month and sellers will likely not be in a hurry.

December 2011

Following Octobers strong shipping performance, California almond packers kept it going as November pushed out 213.1 million pounds. This compares to 173.3 million pounds a year ago. Season to date shipments now stand at 710.3 million pounds, up 11.1% compared to last year. Again, Chinese shipments played a starring role increasing nearly 18 million pounds to 51.5 million. Domestic shipments need to be noted as well up 18% to 53.4 million pounds. Middle East shipments were also notably higher, while Europeans were only slightly up.

Shipments at 11.1% ahead of last year is where California needs to be in order to work through the anticipated 1.95 billion pound crop. Despite commitment numbers dropping by about 100 million pounds (suggesting slower sales in November) commitments plus shipments are at 57% of projected supply. For comparison, this is slightly better than at the same time a year ago and about the same as 2009.

Hullers slowed a little in November compared to October, delivering 437 million pounds to packers. Still, this is 117 million more pounds than in November last year. Total receipts thus far now stand at 1442.1 million pounds, compared to 1202.4 million a year ago. Is there another 500 million pounds still to come in or more? Last year at this time hullers had delivered 74% of the final crop, representing the least completed position in years. Over the previous decade, they have been 81% to 91% finished by the end of November but we note that this years crop was very late. If we use 74% as the completed number for this season, the crop would end at the 1950 million pounds as predicted by NASS. Nevertheless, there are still too many variables to make an accurate prediction.

Today's shipment report does not appear to give a break for buyers who have been waiting. If anything the shipments are better than expected and Chinese uptake does not seem to be slowing. Buyers are moving goods and are not seen sitting on stocks. Shipment momentum should carry sellers through at least through December. Then comes bloom. Even with a good bloom California will be hard pushed to produce another 1.95 billion pound or bigger crop. Help from new bearing acreage will weaken, reflecting the slowdown in new plantings after 2007.

With consumption on a roll and the supply likely to level, all most will see in California will be firm pricing through the next few months.

November 2011

Almond Shipments for the month of October were 219.5 million pounds, this is up 16.1% versus the previous monthly record set last October. Season to date shipments are now 6.8% ahead of last year at 497.3 million pounds. This is a huge news for the Almond industry based on the slow start to the season where shipments were behind by nearly 12% at the end of August.

Of particular notice is China where shipments were 44.5 million pounds. This is up 28% versus October last year and clearly answers questions about Chinese demand. This figure does not include the 4.0 million pounds going to and mostly through Vietnam. India needs a mention at 10.8 million pounds (up 20% versus last year).

Hullers have also been busy, with a record 504 million pounds arriving at handlers in October bringing the season total to 1004 million pounds. This compares to 881 million pounds at the same time a year ago.

Most in California are hesitate to say what this means with regards to the final crop. Most are sticking with the 1950 million pound NASS forecast until proven otherwise.

Following last month's supportive shipping numbers (September report) almond prices firmed 5 to 10 cents per lb.

California has now shipped and committed 1109 million pounds, nearly 52% of projected available supply. This is the strongest end October position since 2007 and underscores the confidence currently being shown by sellers. October shipments have removed any doubt about the strength of consumption. November looks like another busy month for packers. At this point, those looking for bearish news will likely have to wait for January in the hope that the crop is confirmed bigger than expected. Almond Sellers in California will continue to control the conversation over the next month we expect prices to climb again over the next few days.

Note that there are still a lot of almonds and as we have seen in the past, anything can happen at any time.

October 2011

Oh my... to most in the industries surprise, considering harvest was so late with minimal carry-in, restricting the availability of California almonds, September was an even busier than usual in the California, with records being broken for both almond receipts and shipments.

Not withstanding, California shippers pushed out an unprecedented 166.2 million pounds for the month, topping last Septembers total of 151.1 million, up over 12.5%. Inshell shipments provided the boost, with nearly 20 million more pounds of inshell being shipped out compared to a year ago. India proved an eager destination (up 51%). Shipments to China/Hong Kong were down 3%, however Vietnamese shipments were up 575% to 5.5 million pounds and much of this should probably be counted against Chinese consumption. Other export destinations were unexciting (Europe down 5%, Middle East flat).

Crop receipts totaled 473.4 million pounds, the most ever received in one month. Over 80% of the receipts were Nonpareil. Total receipts are now at 500.0 million pounds, compared to 479.5 million at the same time a year ago. Total crop size, however, will remain hidden until December or January. It is a big question mark as we hear excellent nonpareil in the central region, but not so good on the pollinators. In the south yields are higher, but not consistently great.

Looking forward, sellers will be encouraged by todays shipping number. With pollinators now becoming more available and production heavily booked, October is looking to be another record shipping month. Strong demand is reflected in the continuing premium for prompt shipment. Buyers who have hesitated till now, either waiting for pollinators to come in or the dollar to weaken, will likely not care to wait for the October report or additional rain events as harvest finishes up.

Early October 2011

A late start to new crop and very tight carry-over inventories slowed California ability to ship almonds in August and the shipment numbers released Friday reflected the same. Spurred by strong prompt premiums, handlers shipped 111.5 million pounds. This compares to 125.5 million pounds last August.

New Crop, crop receipts for August totaled 26.6 million pounds versus 47.7 million a year ago. So far they have seen only nonpareils coming in. Low insect damage, good color, but generally smaller kernels average sizes are running about 27, and most do see it getting better as the harvest progresses. Lower turnouts than usual (more hull and shell). Weather has been cooperative so far, but rain risks are definitely increasing as they push further into September and then October. The 1.95 billion pound question remains... still too early to say whether the crop will reach or exceed the forecasted figure. Some growers are up 35% for their nonpareil (in line with the increase anticipated by NASS), but there are many that are seeing 15% to 20% increases.

Size and early shipment are driving prices. Nonpareil Supreme 27/30s and smaller have seen downward pressure while larger nuts are being quoted with a premium. Smaller California's are crowding into the standard and BWB market. New crop standards have dropped over past couple weeks, with Sized California prices holding along with manufactured pricing. Weakness in the Euro is proving to be a near-term complication, with many buyers delaying purchases over the past couple days. Additionally the inshell market has gone cold over the past 10 days as buyers anticipate increased inshell production in order to move anticipated small kernels.

Most feel that Inshell buyers will return, but likely will be unwilling to pay the hefty premiums that were seen in the pre-season market. European buying will return, but they will be looking for deals on the small sizes. We are not seeing a compelling argument for higher prices until more is known about the crop, or shipments again surprise against last year's solid performance.

August 2011

Almonds today, it was reported that California handlers shipped 109.7 million pounds of almonds in July, slightly down from shipments of 112.1 million pound in July a year ago. This brings total shipments for the season to a final total of 1667.6 million pounds, up 13.3% from the season before. We note US domestic and western European shipments both up about 9% for the season, while India and China increased by 26% each.

The slowdown in July is was not unexpected and due more to lack of inventory rather than lack of demand. A steep premium for prompt goods is motivating sellers to pack and ship the last few available pounds. August shipment numbers are expected to be even lower as empty warehouses will get little help from a very delayed new crop. Growers in the south (usually the first to start) are saying they will start shaking next week and some only the week after that. Allow a week or so for drying and another few days for hullers to generate momentum and it is unlikely that handlers will pack and ship any significant new crop quantity in August.

At last report prices were picking themselves up after the shock of the Objective 1.95 billion pound forecast. Perhaps emboldened by strong pricing for current crop, California sellers are showing restraint on new crop sales. The late crop and tight transition are making the price outlook over the next few months more complex than usual. Sellers are confident now, but will this be the case when the crop starts coming in earnest? Will the forecasted 2600 lbs per acre really be there? What happens to almond appetites as financial jitters are felt around the globe? How much business will be lost due to inability to ship in time for European holiday retail sales? What will the weather be like in October for such a late harvest?

For most, the key question is the California sold position. It is generally thought that this is less than usual. With early inshell pricing a little higher, new crop Chinese buyers have not been as aggressive as seen a year ago. It seems there is a good chance that more active selling will emerge as warehouses start filling up again in September/October. Barring weather related problems during harvest we do not see significant upside risk for new crop.

Mid-July 2011

The California almond industry released its shipment numbers for the month and the industry appears intent on continuing to shatter records.

Last Wednesday, as we reported, the Objective Estimate for the 2011 crop was announced at an unprecedented 2600 lbs per bearing acre at 1950 million lbs. Then in a sharp counterpunch, shipping numbers for June were reported today at staggering 135.0 million lbs, up 38.1% versus last Junes 97.8 million lbs. Year-to- date shipment totals are now 14.3% ahead of last season. With one more month to go, the carry-out is looking to be well under 250 million lbs.

Shipments to Europe were particularly impressive in June almost doubling to 52.2 million lbs, with Spain and Germany pulling heavily. Middle East shipments continued to impress at 67% more than last year.

In the battle of supply and demand it is tough to say which one looks more impressive at this stage. The carry-in is minimal and is at the lowest level (as a percentage of supply) since the 2005 season. Since 2005, shipments have been growing at 13% compound annual growth rate. It would be a risky bet to count on anything less than 10% growth rate in the next season particularly if almonds keep their place as the most affordable by far tree nut. At 10% growth rate the 1950 million lb crop does not look so formidable.

As expected, in most sellers views new crop quotes have been unreasonably beaten down in a knee-jerk reaction to the estimate number and most seem to agree that prices are expected to find a bottom sooner rather than later. At the same time, sellers are not aggressively bullish as reasonably priced almonds are the key to necessary 10% plus shipment growth. As for current crop, it is no secret that the 2011 crop is going to be late and that stocks are tight, so for now current crop prices quotes are expected to maintain a premium price.

July 2011

The Objective Estimate for the 2011 California almond crop was announced yesterday at 1950 million pounds. Although most observers were anticipating a number higher than the 1750 million pound Subjective Estimate, this number is seen by the industry as higher than expectations.

Of note is that the forecast is based on 750,000 bearing acres and assumes an average yield of 2600 lbs per acre. The highest historical yield per acre was in 2008 when yields averaged close to 2400 lbs per acre. That is a big jump and sellers are taking notice.

This number will be hotly debated by those in California and elsewhere by NASS has been pretty accurate the past few seasons.

Shipments thus far for the 2010 crop are ahead by 12.8% over the prior year. The 1950 million pound number will likely put downside pressure on the market. The question is when. There is much new crop business already on the books for sellers and buyers alike. There is no carry in for current crop and there will be pressure to get new crop shipments out. So for those who can wait, buyers can anticipate good availability from the next crop.

June 2011

Higher prices over the past month did not put the brakes on May shipments which were announced yesterday at 130.4 million pounds, up 41.9% from shipments of 91.9 million a year ago. The season-to-date shipment total has now stretched its lead to 12.8% over last season.

Heavyweights India and China took relative backseats as inshell loads became more difficult to find. Meanwhile European shipments, which had lagged throughout the first 8 months of the year came back in April and have continued in May with shipments to all European destinations up 78%. Season-to-date shipments to Europe are now ahead of last years levels by 4%, a position that looked impossible to attain just two months ago when shipments were lagging by 5% for the region. Exports to Middle East and North Africa are up 103% versus last May.

On the supply side, the 2010 crop finally looks like it has all been counted with the receipt number stalling at about 1625 million pounds for the past two months. The 2011 crop is enjoying cooler than usual growing conditions and plenty of water. This is good for disease and pest pressures, but already it looks like it will be a late harvest.

Yesterday NASS delayed the announcement of the Objective Estimate from end of June to July 6th to allow more time for kernels to harden so that measurements can be made. The late harvest will add to risk of rain on the back end and more importantly will force sellers to supply out of the dwindling 2010 crop for at least a couple weeks longer than usual.

Carry-over into the next crop is looking to total well under 300 million pounds at the end of July. A two week delay in the crop will require another 50 to 70 million pounds out of current crop that will not be easy to find.

At this point it is clear that demand at lower prices is stronger than current supply can satisfy. A continued 12.8% increase in shipments is not sustainable even with an 1850 million pound 2011 crop. Already we have seen prices rise to account for this imbalance, but most feel it is likely that they will have to move even higher.

Mid May 2011

As we know, last week was the announcement of the Subjective crop estimate at 1.75 billion pounds. The number was teed up about a week earlier with the bearing acreage estimated on the low side of expectations at 750,000 acres. There will be talk of other forecasts, but 1.75 billion is the number to deal with until the Objective crop estimate comes in late June.

Yesterday the shipment numbers were released and they were strong. It was anticipated that lower prices would bring European buyers into the market and this was emphatically confirmed in the report with western European shipments adding over 10 million pounds (up 34%) versus last April. Strong shipment to China (up 175%) and India (up 76%) helped exports to turn total April shipments into a record month at 126.4 million pounds, up nearly 20% versus last April's total of 105.7 million pounds. Domestic shipments posted a soled gain of 7%. Middle East shipments continue to struggle versus last year with a drop of 15% for the region.

Total shipments for the season are now 10.5% ahead of last years pace and look set to top 1600 million pounds by the end of July.

Prices over the past month succumbed to continued talk of the looming 2011 crop. Prior to last week's Subjective announcement, current crop prices had pulled back. Small premiums were being paid for sized Californias. Following the announcement there was an immediate jump by 5 cents by some sellers, which has stretched further the past couple days ahead of the shipping report. New crop is still being discounted by 10 to 15 cents per lb, which some in California believe will likely not last much longer with the updated supply picture.

The outlook for sellers is improving, at least from Californias perspective. The carryover is now looking to be closer to 300 million pounds than 350 million pounds. For California to ship the projected 1.75 billion pound crop without increasing the carryout, shipments will need to increase by only 5%. With shipment currently at 10.5% versus last year, this is a very achievable task.

Most believe prices will likely move higher as it looks like a gentle tap on the brakes is needed. Now might just be the time to re-open our discussion on New Crop.

May 2011

2011 CALIFORNIA ALMOND FORECAST
MAY 5, 2011

RESULTS

The initial subjective forecast for the 2011 California almond production is 1.75 billion pounds.  This is 6 percent above last year's production of 1.65 billion pounds.  Estimated bearing acreage for 2011 is 750 thousand.  This forecast is based on a telephone survey conducted April 21 - May 2 from a sample of almond growers.  Of the 486 growers sampled, 375 reported.  Acreage from these reports accounted for 27 percent of the total bearing acreage.

After a good winter with excellent chilling hours, the 2011 almond crop bloom began.  A cold spring lengthened the bloom, causing more overlap between varieties.  Cold weather can affect bee activity, but pollination was successful this year and California almond trees set a good crop.  Freezing temperatures this spring did affect the northern regions more than the south, but frost damage was not significant.  Older plantings suffered some damage from the strong winds that accompanied the spring storms, but overall damage was minimal.  Spotty damage from hail was also noted.  Low disease and insect pressure have been reported and, with all the precipitation California has seen this winter, lack of water for irrigation is not the problem it was a few years ago.  

Normal levels of shed have been reported.  The crop in general is reported to be good with heavy sets noted on several varieties.

PROCEDURES

Results of the subjective survey are based on opinions obtained from growers.  The sample of growers changes from year to year and is grouped by size of operation, so all growers will be represented.  Each selected grower is asked to indicate their almond yield per acre from last year and expected yield for the current year.

ACKNOWLEDGMENTS

A special thanks goes to the many almond farm operators and owners who provided information on their operations.  The support was outstanding and we appreciate the time they spent completing telephone interviews.    

Late April 2011

750,000 bearing acres estimated for 2011 crop - full report can be accessed by clicking
here.

April 2011

California handlers reported shipments of 130.4 million pounds in March, up 21.6% versus last March shipments of 107.3 million pounds. Season to date shipments are now ahead by 9.6%. In particular were Domestic Shipments (adding 6.4 million pounds) and China (adding 10.7 million). This is the news that California sellers wanted to hear as it should stop the slide in prices and along with the news that the current crop receipts are slowing to a trickle (adding only 9 million pounds in March to total 1618.4 million).

Prices have been weak over the past month, as increasing optimism about new crop has prompted some sellers to chase lowering bids. In the southern end of the valley bloom conditions were decent and they are seeing a good crop on the young trees and adequate on older orchards. In the central portion of the state, where last year mother nature was not as generous, appears to be making up for it this year with what looks will be a very good crop. Negative news that was coming from northern growers has quieted and apparently there is a crop there after all.

Lower prices and weak dollar are combining to tempt buyers to add coverage and good volumes are believed to have been done over the past few weeks. The March shipment number might give sellers the courage to stop the slide and as a result we might see offers move up slightly. Expectations for a strong 2011 crop, however, will continue to be the main factor and the market is unlikely to move sharply higher until this is proved otherwise.

February 2011

Monthly shipment numbers were released today and Crop receipts in January totaled 124.2 million pounds, bringing the 2010 crop total so far to 1548.6 million pounds. Last year another 43 million pounds were received after the end of January. This year the number will likely be higher and the final 2010 crop will probably be a little over 1600 million pounds. The NASS total forecast (1650 million pounds) does not appear to be far off.

Breaking a six month streak of solid shipment gains, California shipped 119.8 million pounds of almonds in January, down from 122.1 million pounds a year ago. While domestic shipment continued to power ahead (up nearly 9% versus last January), lower January export levels are primarily attributed to China (down 39%), Western Europe (down 13%) and the Middle East (down 8%). Stronger export destinations included India (up 6%), Japan (up 11%) and Russia (up 93%). Chinese weakness was anticipated. They imported heavily earlier in the season and despite a slow January are still up 9% for the year. After a break in December, Chinese buying interest for inshell came back in mid January. Western European buying has slipped even further behind last years levels and is now down 9% for the year. it is felt that European trade in general has been reluctant to book forward. Second quarter is relatively uncovered, with buyers anticipating lower pricing later.

The general fundamentals are strong. Shipments still look on track to consume the 2010 crop and perhaps a little more. There are wet nut losses from the 2010 crop that are still being dealt with. Demand over the next few months is expected to be strong because Europeans need cover, Indian warehouses are relatively empty versus a year ago, Chinese buying will likely resume after the New Year holiday. The dollar is weak. Almonds are still a relative deal versus other tree nuts. However, it is important to note that todays combination of slightly higher than anticipated receipts and small slip in shipments will not bring buyers running back to the table.

Weather over the next few weeks will be critical. The bloom is about to begin in California. Harvest will start soon in Australia. Good conditions will push prices lower, but most in California see limited downside as demand is sitting on the sidelines waiting to come in.

January 2011

The shipment numbers were released earlier today and shipments remain extremely strong. Currently, the industry is shipping 11% more than last year. If they finished the year up 10% over last year, they would ship 1.618 billion pounds and be left with around 200 million pounds of carry in, the smallest they have had in some time.

The current receipts are at 1.424 billion pounds. On average, the industry is at 94.6% of receipts by the end of December. That would put total receipts at 1.505 billion pounds, far short of the 1.650 billion pound estimate. Over the last 5 years, the least receipts they have had by Dec 31 was in the big crop year of 08/09 at 92.1%.

The question is if they were lagging that far behind, total receipts would come in at 1.546 billion pounds. We dont think they are that far behind, but, that still puts them 100 million pounds under the estimate. It seems it will go the way that many have been saying, likely to come in at between 1.5 and 1.55 billion pounds.

November 2010

A record 189.1 million pounds of almonds, up over 12% from the previous record set last October of 168.0 million pounds were reported today in the October shipment report.

As anticipated the industry is now seeing better numbers to European destinations (up 11%) as pipelines replenish and later than usual new crop California varieties finally become more available. Middle East shipments continue to power along at 29% more than a year ago. Domestic shipments were up 10.4% at 49.0 million pounds. Chinese October shipment are noteworthy at 34.6 million pounds (up 21%) and helped to offset mediocre numbers to India (9.0 million pounds) where importers are likely still chewing through huge September shipments.

Reflecting good buying interest, prices have been steady to firm since last report. Adding to the stronger sentiment, rain has made for wet and difficult harvest conditions for late varieties, with some concern for losses or at least degradation of quality. Over the past couple weeks the bottom end of the market has firmed on Brown Skin while Manufactured prices for slice and slivered were flat most of the month, but have recently strengthened to better reflect input pricing over the past few days.

Year-to-date shipments are up 9.3% at 465.8 million pounds. Barring any surprises one can anticipate another year of good shipment growth.

The supply side, however, is more uncertain than usual. 2010 crop receipts added 400.2 million pounds in October and now total 881.4 million pounds, about 87 million pounds behind last years pace. As noted before, the year on year comparison is misleading because of the later crop. Wet weather will have slowed hulling pace in October. If there is any consensus in California, it is that the 1650 million pound forecast is now the topside of expectations. As to how much the crop will fall short of this number still elicits a wide range of opinions. Only once they know the crop number can they start seriously considering carryover projections and potential supply in 2011.

Until more is known about the crop (which may be in early January) the market will likely concentrate more on the relative certainty of the demand side; strong shipments, improving economic outlook in key destination countries, a weak dollar and lack of competitively priced alternatives.

Most would expect that today's shipment report will add support to the firming trend, but do not expect anything too dramatic.

October 2010

California shipped a record 151.1 million pounds in September, up 12.5% from September shipments of 134.3 million a year ago. Domestic shipments continue to power along (up 12%), while exports kicked into high gear with Indian and Chinese shipments doubling versus a year ago. Middle East shipments are up 27% for the month, while European shipments are 28% behind last year.

Receipts (almonds delivered from hullers to handlers) for September totaled 432 million pounds. This is nothing spectacular and either means slow hulling, or lack of product from the field. Compare to September numbers of 456, 440 and 441 million pounds over the past few years. Deliveries of Nonpareil were well underway by the start of September and a late crop does not explain the mediocre tally.

Commitments are strong (512.6 million pounds versus 419.5 million). The change in commitments suggests sales of 222 million pounds. This is the highest month of sales on record.

Prices have been a mixed bag. Nonpareils have softened as Asian interest waned and sellers came out armed with better ideas of quality and sizes. Standards seem to be holding. Lack of small sizes is keeping the standard discount in check to a few cents versus sized SSR. Manufactured prices firmed slightly but have for the most part not moved much. while

Today's report will encourage sellers. Amidst a dearth of competitive tree nut alternatives, India will be back for more, Chinese will begin inquiries for almonds again and European demand is expected to continue. Meanwhile crop size questions remain unanswered but at this point it appears that a full 1650 million pounds will be unlikely.

September 2010

For the past couple of months this market has puzzled and surprised most observers. Despite anticipation for the biggest crop in history (1650 million pounds) plus a surprisingly carry-over of more than 300 million pounds, prices have done nothing but climb higher amidst keen buying interest and sometimes-reluctant sellers.

Perhaps the crop will not materialize as forecast? At this stage most cannot say for sure. The monthly shipment numbers were released last week and August receipts were noted at 47.8 million pounds, well off from 112.1 million last August. But it is a late crop and the numbers are not comparable. Field-on-field comparisons are a mixed bag, but perhaps not as uniform as one might expect if nonpareil is going to reach the forecasted 17% increase of 650 million pounds.

Shipments have picked up their pace over the past couple months. In August California shipped 125.5 million pounds, slightly higher than shipments of 123.7 million pounds a year ago. This is remarkable given the late crop and expectation that early inshell shipments would be well off last years levels. Inshell exports in fact are higher this August (12.6 million versus 10.2 million). Some of this would be 2009 crop, but shipments are shipments. We also see a very strong start in the US market, up 17% at 45.7 million pounds. It is also worth mentioning that European imports continue to lag (off by more than 12 million pounds or 25% in August), but the difference is being made up by other destinations.

Commitments are also strong at 441.7 million pounds. Shipments plus commitments are now standing at about 29.5% of the projected supply. Although not quite as well sold as at this time last year (32.4%), its still reflects as well sold position as California has enjoyed in the previous 5 years.

In current crop, pricing has indeed firmed. Disappointing bloom weather in Australia has contributed to inshell strength, with Chinese and Indian buyers turning more aggressively to California. Manufactured pricing, as is typically the case in an up market, have lagged, but are now adjusting to brownskin levels.

Of note this time of year are the cousin Tree nuts. Walnuts are facing a good crop, but also very strong demand and an empty pipeline. Pistachio pricing is firm. Hazelnuts and pecans are heading into an off-year. At the same time as noted last month, if the almond crop is truly 1650 million pounds then California will need to increase shipments by 7 to 10% to take care of the crop. If prices are pushed too high, demand will suffer. The past few days of last week noted some hesitancy from Indian and Chinese buyers (the key to this market). If indeed the crop is short then we will see higher prices. If not, we anticipate that sellers who may have sold too much at lower prices will again start offering and perhaps buyers will not be as keen at higher levels. More to come.

August 2010

Although European shipments continue to lag last years levels (down 31%),
strong shipments to Dubai (up 220% at 5.2 million pounds) and China (up
92% at 5.0 million pounds) have helped bring the July shipment total to
112.1 million pounds. This compares to 121.1 million pounds last July.
Strong inshell interest is reflected in end-of-season shipments to China
and India totaling about 9.0 million pounds kernel basis.

Encouraged by the sharp drop in prices a month ago, buying interested has
been brisk and there have been enough sellers to make an active market.
Commitments were reported at 167.2 million pounds, little changed from
last month and indicating new sales of 114.1 million pounds in July.

Prices fell sharply following last month's double whammy of a 2010 crop
forecast at 1650 million pounds and disappointing June shipments. A few
observations of what is being reported; Their appears to be a lack of real
standards causing tightness and small premiums for sized SSR pollinators,
current crop NP kernels continue to be available and discounted to new
crop levels, and new crop NP size 25/27 and 27/30 remain offered at
premiums due to concern with size.

California can feel quite satisfied with the price progression of the past
month. The recovery has been quicker than anticipated. Prices are almost
back to where they were before the crop forecast, which remains unchanged
at 1650 million pounds and will be the number the market has to deal with
until November or December. Today's shipment number changes the overall
supply outlook by about 10 million pounds. California still needs to
increase shipments by 7% to 10% to take care of the additional supply.
August shipments will not be helped by a harvest that is about a week to
10 days later than last year. Shipments in September and October will be
critical if momentum is to be continued.

The next few weeks will be the time to watch.

July 2010

Update July 12, 2010

The As we reported last week, Thursday the NASS objective forecast came in much higher than expected at 1650 million pounds and Friday the June shipment number of 97.8 million pounds does little to lighten the mood of Almond sellers in California.

Last June, spurred by low prices and pent up demand in Europe, California shipped 118.4 million pounds. This June, European shipments are off by 44% and decent performances in the domestic and Asian markets, particularly India, were unable to make a significant dent in the shortfall.

Until the figures of the past couple of days the almond market seemed to finding levels that were working for both buyers and sellers as inquires as well as Trading has picked up quite a bit. The commitment numbers suggest sales of about 94 million pounds, much busier than in May when sales almost came to a standstill. Driven by good demand and shrinking supply of small kernels, standards had firmed by about 10 cents by the first week of July. Good interest from India and China was seen for inshell and as inshell offers ran out kernels were being bought quite actively.

The NASS crop number will be the main factor over the next months. Until they have better information there is no arguing with it. NASS has been relatively accurate in the past. 1650 million pounds of fresh crop plus a carry over that looks now to be about 320 million pounds will mean a total supply near 1925 million pounds (after adjusting loss).

Shipments for the 2009 season are currently up just over 7% over 2008. The compounded annual growth rate since 1999 is at 7.5%. California would not sustain be able to carry-over 465 million pounds. Big crops are now normal and almonds continue to need to be sold and consumed. A 10% growth rate next season is attainable, but some help from lower prices will be needed. Prices will adjust to levels that will attract strong demand from price sensitive buyers, shipments will react positively and prices will firm as demand levels are confirmed.

Stay tuned.

Objective Estimate Released July 8, 2010

The Objective almond forecast for the 2010 crop is set at 1650 million pounds. This is up from the Subjective estimate which in early May put the
crop at 1530 million pounds. Nonpareil is forecast at 640 million pounds, up from last year's actual result of 545 million pounds. NASS cited cool
weather conditions as contributing to the crop developing well and with lower than usual insect pressure. Both nut set per tree and average kernel
size (weight) was up versus last season.

Most would now expect prices to soften on this news as up to this point expectations seemed to be centered around the 1500 million pound mark.

Tomorrow brings the June shipment report and will certainly give a clearer picture as to where prices are.

May 2010 Update

May Almond Shipment Numbers were released today.  Domestic shipments are up nearly 19% to 39.6 million pounds in May versus 33.0 million a year ago.  Exports, however, totaled 52.7 million pounds versus 86.3 million last May (down nearly 39%).    At a combined total of 91.9 million pounds shipments are down 23% from 119.4 million in May 2009.  A lower number had been anticipated, but most guess that this is going to disappoint. 

Commitment numbers are uninspiring at 169 million pounds versus 280 million a year ago.   The change in commitments from last month indicates new sales of just 21.8 million pounds in May.  Encompassed by a battered currency and lack of confidence in future almond prices, European buyers are going hand-to-mouth.  European demand seems to be covered for the next few weeks.  Certainly their stock position is better than at this time last year.  They will need to add cover before new crop, but when this will happen is uncertain.   In the Middle East, Chinese reselling continues to dampen enthusiasm and local market prices are reported at a discount to California offers.

 

With a lack of buyers and some willing sellers, almond prices have continued lower since last report.  Manufactured prices have held up a little better than Whole Brown.

 

May�s shipment shortfall swells the expected carryout to around 280 to 290 million pounds.   Even with expectations for harvest to begin a week or so later than usual, there will be ample supply to get the industry into new crop although not all varieties are available from Current Crop.

 

Starting the new crop at lower prices should encourage a return of strong buying seen at the beginning of last season.   Almonds are already a relative bargain compared to other tree nuts and once confidence returns to the market we would anticipate buyers will return with healthy appetites and for the market to turn upward once again..

May 2010

The Industry Shipment Numbers were released today and Almond shipments in April totaled 105.6 million pounds, down from 11.8 million pounds a year ago. Exports struggled along at 14.1% lower than last April, while domestic shipments picked up some of the slack and ended 16% higher. Lower shipments were noted in the Middle East (down 27%) and Asia (down 46%) while Europe was slightly up (2%) over last year.

Commitments reflect a quiet market. Just over 66 million pounds were sold by California in April bringing the uncommitted inventory to 363 million pounds with 3 months left to go in the season. This compares to sales of 100 million pounds in March.

Amidst selling pressure, standard 5 prices slipped last week before the subjective estimate. The estimate came in a little higher than expected at 1530 million pounds, indicating an improving crop picture. The news came at an awkward time. Demand for the previous few weeks had been relatively slow out of Europe due to currency and debt concerns. Ramadan demand had been muted, with Middle East traders citing local stocks and unwilling to take fresh bets in a slow market. In addition, Chinese buyers remained uninterested and look likely to continue this way another month or two. Consequently, the prospect of a better 2010 crop than previously thought allowed buyers to adjust their sights another 20 cents lower and bring enough sellers with them to make a market.

Most believe that todays report is unlikely to change the mood of the market. Ramadan needs will need to be purchased and shipped by the middle of June, but judging from the past few a flurry of demand is not expected. European buyers will watch for a while to see where the dust settles. Some believe that it is unlikely that California sellers will unitedly wait it out. Whether the reason is cash flow, grower calls or just the desire to finish the season, it could be anticipated that there will be enough sellers to follow prices a little further down.

April 2010

Subjective Almond Estimate Released May 6th 2010

The subjective almond report was released yesterday showing the 2010 crop anticipated at 1530 million pounds on 740,000 bearing acres.   This would put market anticipation at 1450 to 1500 million pounds.  So slightly above expectations and no strengthening will result from this number.

 At 1530 million lbs, and assuming a 2010 carry in and carryout at a relatively slim 220 million lbs, there will be 1485 million pounds available for shipments  (3% loss).   For the 2009 crop which started at very low prices the industry is on track to ship around 1530 million pounds for the season.   So based on this forecast, shipments would have to shrink about 3 per cent in the 2010 season.

 The chart below shows a history of subjective and objective estimates versus the actual result. 

Crop

Subjective

Objective

Actual

1990

640

655

655

1991

450

460

489

1992

570

550

545

1993

520

470

488

1994

610

640

732

1995

430

310

366

1996

520

530

507

1997

710

680

752

1998

550

540

517

1999

760

830

830

2000

675

640

698

2001

875

850

824

2002

940

980

1084

2003

920

1000

1033

2004

1100

1080

998

2005

850

880

912

2006

1020

1050

1113

2007

1310

1330

1377

2008

1460

1500

1614

2009

1450

1350

1400

2010

1530

 

 

March 2010

The monthly Almond Shipments report was released today and it reported that California shipped 107.3 million pounds in March, slightly above the 106.3 million shipped in March last year. The change in the commitment numbers from last month indicates March sales at a respectable 99.6 million pounds.

Over the past several weeks the sun came out after less than perfect bloom weather prices in general dropped about 15 to 20 cents per pound in Current Crop offers. The past 10 days, however, has seen the market recover as a more rational picture of 2010 crop starts to focus. Cumulative bee hours as reported by a long-time observer were as low as they had been since 2005 and bee colony strength the most variable in memory. In general nonpareil looks a little less than average, as do the buttes and padres. Fritz look their usual vigorous selves, Monterey and Carmel look okay.

Today's position report appears to be neutral. The market was not expecting a big shipping number. The picture for the next few months is one of limited availability for some sizes and grades, a reasonable to slim carry-out , a new crop that is lower than shipments from the previous season and prices that still look reasonable compared to competing nuts. It is too difficult to say up or down from here with any confidence. It will likely take new information to point fresh direction.

February 2010

The monthly shipment report was released yesterday. California shipped 115.5 million pounds in February, just slightly below shipments of 116.5 million in February a year ago. Of note on the report are the weak exports to China and Dubai, while European buying took up the slack.

Commitments dropped by 84 million pounds from last month to 286 million. This compares to 355 million a year ago and infers sales of only 31 million pounds in February. Both buyers and sellers seemed content to sit on the sidelines to watch the bloom unfold.

Bloom has come and gone. Conditions were mixed, beginning with a good week prior to February 19th, and then successive weather events rolled across California, clouding the picture. The south appears to have fared better than the central and northern areas. At this point, most agree that the only conclusion that can be made is that the crop will be well off its potential.

It is too early to say with any accuracy what that crop potential is but what is clear, however, based on shipment numbers a crop of 1500 million pounds or more is needed to keep feeding demand. Higher prices will take the edge off appetites, particularly in developing markets. Competing nuts will also likely be less expensive (but whether less expensive than almonds is open to debate). Even still, it is pretty clear that buying will continue as almonds appear on more shelves and in more products.

California will ship close to 1550 million pounds this season. With a minimal carryout and adjusting for 3% disappearance, a 1500 million pound crop will leave only 1455 million pounds available and force a 6% or more decrease in shipments. Against a backdrop of a recovering world economy California sellers will likely not have to drop prices to achieve this kind of result. They are already seeing an increase in European inquiries for summer positions. Most anticipate that Middle East Ramadan demand will pick up over the next few weeks. Patient California sellers will be able to convert the remaining 20% of the unsold 2009 crop without lowering offers.

January 2010

Almond shipments out of California reportedly continued at another strong pace in January. Shipments for the month were reported at 122.1 million pounds, up 31.9% versus 92.5 million pounds a year ago. Season to date shipments now stand at 841.1 million pounds, up 20.9% versus last year. Commitments dropped slightly to 370 million. This number, however, needs to be seen in context of how much is left to sell. With six months left in the season there is approximately 310 million pounds left to sell (assuming carry out of 200 million). This is just over 50 million pounds per month and may not be difficult to achieve even at today's inflated prices.

Following last months strong shipment report, prices jumped higher by about 20 to 25 cents per lb. for prompt and summer shipment. The past couple of weeks however, the market has gone relatively quiet. Buyers have been reluctant to book and there are a few weaker sellers that have shaken confidence with aggressive offers. A stronger dollar has not helped the mood.

The elephant in the room is bloom weather. Traders buying ideas really do not mean much until they have a better idea of what supply will be from the 2010 crop. If they are to expect a crop of 1600 million pounds plus, perhaps there is justification for prices to soften in order to entice price sensitive customers (read China)to repeat the heavy lifting seen in 2009. If bloom gives rise to expectations of 1500 million pounds or less then lower prices will likely be unnecessary to keep shipments at pace commensurate with supply. A problem during bloom will spike prices even higher. The next few weeks will tell and should certainly be interesting.

For now, chill hours have been decent and the past couple weeks have been wet and cold. Weather is expected to be decent the next week or so. Most anticipate that the bloom should move along quickly from here. Bees are reported to be more of an issue than usual, but nothing of any substance has been confirmed.

For today the story is already written. There is only 20% left to sell in the remaining 6 months. Ramadan needs will have to come from 2009 crop. European buying out of current crop is expected to return after bloom as they prepare for the holiday season with a relatively empty pipeline. California sellers have the ability to steer this market and even a good bloom should not cause much weakness over the next few months.

December 2009

California packers shipped 147.5 million pounds in December. This is up 57.5% over last January. The cumulative season-to-date now stands at 719.0 million pounds, 19.2% ahead of last year’s pace.

Export markets continue to be the main driver of growth and with shipments to China totaling 30.2 million pounds (compared to 4.0 million a year ago). On a smaller scale, but also posting gains, were major markets such as South Korea, Taiwan, Russia and Dubai which more than doubled December almond imports and India was up 77%.

Notwithstanding higher price quotes and many withdrawn sellers in December, sales continued along at about 107 million pounds, bringing the committed number to 407 million pounds. Add the commitments to the shipments and California stands at 1126 million pounds, or about 65.3% of total supply. This compares to 53.0% a year ago at this time and 61.3% two years ago. With this kind of position sellers will be in no hurry to quote future.

Almond prices over the past month continued to climb. Standards up about 25 cents before today’s report were trading near $2.05 per for prompt shipment. Until recently Nonpareils creped up slowly compared to California Type. We are now seeing a resurgence of Nonpareil interest as Carmel and other variety Supremes push closer to NP prices and availability of substitutes shrink. We expect Nonpareil to enjoy relatively better advances over the next several weeks. Blanched sliced and slivered were up as well.

Today’s report confirms what we have already seen at work over the past several months. The shipment pace obviously cannot be sustained with current supply. One might argue that Chinese New Year kicks off in mid February and we can expect a period of digestion out of the Far East. However, the consumption story is bigger than just China. Even further price increases will be necessary to moderate the pace of shipments. Bloom conditions become even more critical as California faces a minimal carry-in and strong demand.

November 2009

This week California shipments in November were 145.5 million pounds. This is up 23.0% versus last November’s 118.2 million pound effort. Though China provided the heavy lifting, assistance was given by domestic shipments, up nearly 4 million pounds to 35.9 million, and the Middle East where shipments to Turkey and Dubai were again sharply higher than last year.

Total commitments hardly budged from last month’s levels, despite record shipments. So one could assume that California sold about 144 million pounds in November, bringing total committed plus shipped to about 59%. This is over 10% higher than at the same time a year ago. The previous November sales record was 92.1 million pounds in 2006. It certainly appears that California is on track to ship over 1500 million pounds and whittle down stock to a bare bones carry-out to next season.

On the crop side the consensus is gelling around a 1.35 billion pound number. So far 1.224 billion pounds has been reported, still roughly on track with the 2007 crop receipts (which totaled 1.38 billion).

Since last report we have seen California prices jump substantially. Supremes continue to be in hot demand, but scarce supply. California inshell has been hot – with China buying any variety available.

So here we are another month later we have higher prices and strong demand. There is 36% of the crop left to sell, with 8 more months to sell it in, looking like an over sold position. One might argue that if we see any blip in the new crop bloom this market is set to go Bananas. It could be argued that the best prices are today’s prices until next August as there is nothing in this month’s shipment report that would discourage sellers from asking for more and them likely getting it.

October 2009

October shipments were strong at the reported 168.0 million pounds this week. This is highest monthly total ever for California, and it beats last October by 6.6%. Season to date shipment totals are ahead of last year’s pace by 8.8%.

Its being reported that the crop continues to look like 1.30 to 1.35 billion pounds. Receipts in October totaled 400.2 million pounds. Season to date receipts are now at 968 million pounds versus 1020 million lbs in 2007. Commitments moved higher by 29 million pounds despite the record shipments and totaled 448 million pounds at the end of October. Nearly 200 million pounds of almonds were sold in October. Commitments plus shipments are now just over 50% of total supply.

As a result of all of this momentum Almond prices started moving higher at the beginning of October. Nonpareils were already were trading at large premiums to most of the other California varieties, but those gaps have closed dramatically over recent weeks. Prices for manufactured almonds have struggled to match the gains seen in California grades.

Most sellers have been anticipating higher prices for several months now. Looking forward the key to strong prices will be continued strong shipments. Numbers that keep California on track to ship 8 to 10% higher than last season will keep this market firm and likely portend even higher prices. It is important to note that almonds are still relatively cheap compared to their other nut cousins. Interest continues from China and elsewhere. Continuing weakness in the dollar also helps. It should be an interesting period leading in to bloom but for now, higher prices seem to be on the horizon.

September 2009

As most had anticipated in California, Indian inshell shipments were lower in September. The 9 million pound shortfall in Indian inshell shipments dragged the overall September shipment number to 134.2 million pounds, down from 137.2 million in September a year ago. Offsetting Indian weakness was some strength returning to western European shipments, which
totaled 48.0 million versus 39.0 million a year ago.

Handlers reported receipts of 456 million pounds, bringing the end September total to 568 million pounds. This is about 14 million pounds more than at the same time last year, but last year is not the correct comparison. Huller stockyards, which were overflowing at this time last year, are relatively empty. Perhaps this could be compared to the 2007 crop which was about 43% received by the end of September. This would suggest a final crop in the 1300 to 1350 million pound range.

The commitment number is a little disappointing, dropping from 452 million pounds the previous month to 419 million. This infers sales of just over 100 million pounds in September – about
half of what we have seen the past two seasons. Most believe that slower sales are likely more reflective of reluctance of sellers rather than interested buyers. We have seen the bottom end of the market move up smartly the past 7 to 10 days especially in the Standards market as well as the Cal, Carmel, Monterey markets. Nonpareil kernels have not seen the same push and prices continue at about the same levels.

In summary this months position report is not likely to make any waves. Although not a record shipment, the number is not bad when the Indian shipments are taken into account. For the Indian market the weaker number will be a positive and relieve the excess inventory concerns and firmer pricing should hold and Indian shipments will recover. The big picture for the rest of the market continues to be one of strong shipments, crop concerns and increasing reliance on a good bloom in February to ensure adequate supply going forward. Much of the run-up of the last week may have been in anticipation of this past Friday’s report and buyers covering their bets.

The hope is that this relatively uneventful report will encourage both buyers and sellers to get on with the business of moving almonds to consumers.

August 2009

Strong California shipments continue. August shipments totaled 123.755 million, up 28% versus shipments of 96.7 million pounds in August a year ago. Strength came from all quarters. Domestic was up strongly, Western Europe was up 25%, China pulled strongly and unexpectedly Indian inshell imports were even slightly higher than last August despite the late crop and lackluster buying interest in the second half of the month.

On the crop side the reports so far are encouragement for firmer pricing. Receipts from hullers are noted at 112 million pounds. Part of this is due to the late crop, but it is not a number that will have the bulls worried. This compares with 114 million pounds last year and 153 million pounds in August two years ago. The talk amongst growers is that yields are not living up to forecasts (which were already anticipating a significant decrease from last year). The talk amongst hullers is that they are moving more quickly through this crop than anticipated. Stockpiles are smaller and transition from nonpareil to other varieties seems quicker than usual. So far, quality seems decent with insect damage in the nonpareil under control and good size and color.

Many packers report that it has been unusually quiet for the beginning of the season. The commitment numbers however show a pretty good sold position at 452 million pounds. At the end of August California had 396 million pounds on the books. Total sold and shipped position is now 576 million pounds or about 33.4% of total supply (assuming a 1.35 billion crop). This is a higher sold position than the past four seasons, which ranged between 25% and 29% sold and shipped.

Prices over the past month have been a mixed bag. A scramble of interest for Carmel Supremes from the Middle East and elsewhere has pushed prices higher. Meanwhile the Nonpareils have been relatively ignored and prices have been a little soft.

So here we are with another month of strong shipments and concerns on the crop front. Add this to a weak dollar and affordable price levels and most continue to feel that price risk is to the upside. There will be some selling pressure due to warehouse space and cash flow considerations over the next month or two, but probably not enough to prevent prices from moving higher.

End July 2009

California almond shipments ended the crop year on a high note with July numbers reported at 121.1 million pounds. This is 21.6% higher than last July’s figure of 99.5 million pounds. Total shipments for the season (seasons ends July 31st) are 1.389 billion pounds, up 10.2% over the year before. The carryover is now an official 407.9 million pounds – a number that did not seem achievable when forecasting back in January and shipments were actually behind last year’s levels.

Shaking in the south started about a week ago and the first of the nonpareils are moving through the hullers and beginning to arrive at handler’s facilities. It is typically the stressed fields that are ready first, so there are is no reliable view on sizes and insect damage yet, but the general talk is that sizes out of the huller look bigger and reports on insect damage have varied. There is no sense of yields yet, though growers in the south are reporting that they are uniformly disappointed in the nonpareil.

Almond prices have struggled to gain traction over the past few weeks. Following the objective estimate and subsequent strong shipping number released in early July, sellers hiked offers by about 10 to 15 cents on all items. There was some business done, but pricing ideas slowly sputtered as buyers made a very good show of going on vacation.

What is clear is that there is still a lack of confidence in the ability of the market to move higher. This is somewhat puzzling to some. There is no question that shipments have strong momentum. There are some weak spots in the shipments story (in particular Western and Eastern Europe), but the overall outlook is positive. The main question at this stage is the size of the coming crop.

We will get more information on this over the coming weeks, but if the yields are in line with the 1.35 billion pounds, inventories will be drawn down to the point where eventually prices will react positively.pmen

July 2009

June shipments were expected to be big and the numbers released today confirm that. At 118.4 million pounds shipments are up 15.3% over last June’s 102.7 million. With only one month left to go in the crop year, cumulative shipments for the season are now 9.2% ahead of last year’s pace.

With the Objective forecast at 1.35 billion pounds and shipments powering along, California sellers appear to be in a much more confident mood over the past week. The vanishing of 100 million pounds from expectations for the next crop now puts California in a position to significantly drawdown the carryover into the 2010 season. The numbers are far friendlier for sellers than a few months ago when warehouses were bulging with the biggest crop ever and shipments were struggling to gain traction amidst a world economic crisis.

At 8% growth in shipments (a lower number than experienced over the past 11 months and arguably a realistic expectation) California will shrink the carryout to a very manageable and arguably tight level of 229 million pounds. IF these projections are reality (the crop needs to come in as forecast and shipments need to continue above last year’s levels) then rising prices are believed to be inevitable.

Over the past few weeks we have continued to see prices move up. Standard 5% was recently trading near $1.12 for current crop and $1.15 for new crop early positions. Further out positions (January and beyond) are being offered at a premium to these levels. Nonpareils, which are forecast to be down over 26%, are being frugally offered and price levels are reflecting a 10 to 15 cent gain. Manufactured almonds are now 10 cents higher as well.

Given today’s shipping number, further strengthening is likely over next few weeks. This will be especially true for the nonpareils. That said, sellers need to remember that the shipments are the key to prices and that lack of realistic offers will slowly strangle the golden goose. There are still plenty of almonds to be moved, hopefully at prices that are good for growers and consumers alike.

June 30th, 2009 Objective Forecast

The Objective forecast was released today by NASS putting the crop at 1.35 billion pounds from 710,000 bearing acres.   This is a 100 million pound decrease from the Subjective forecast released in early May.   The nonpareil is forecast at 450 million pounds – down 26% versus last year.  This is on the lower end of expectations.  The market has been very quiet and prices had retreated since the Subjective forecast. 

The table below shows a history of Subjective and Objective forecasts versus actual crops.

NASS Forecasts

 

 

 

 

 

Crop

Subjective

Objective

Actual

NP Forecast

NP Actual

Obj. vs Actual

1990

640

655

655

 

 

0.00%

1991

450

460

489

 

 

6.30%

1992

570

550

545

 

 

-0.91%

1993

520

470

488

 

 

3.83%

1994

610

640

732

 

 

14.38%

1995

430

310

366

 

 

18.06%

1996

520

530

507

 

 

-4.34%

1997

710

680

752

 

 

10.59%

1998

550

540

517

 

 

-4.26%

1999

760

830

830

 

 

0.00%

2000

675

640

698

 

 

9.06%

2001

875

850

824

 

 

-3.06%

2002

940

980

1084

 

 

10.61%

2003

920

1000

1033

 

 

3.30%

2004

1100

1080

998

 

 

-7.59%

2005

850

880

912

280

281.9

3.64%

2006

1020

1050

1113

378

457.2

6.00%

2007

1310

1330

1377

473

522.8

3.53%

2008

1460

1500

1610

538

605.5

7.33%

2009

1450

1350

 

450

 

 

June 2009

California May almond shipments were expected to be huge, and the number reported yesterday was 119.3 million pounds. This is 34.9% higher than shipments of 88.4 million pounds in May last year and boosts the cumulative season-to-date total to 1149.8 million pounds. Season –to-date shipments are now up 8.6% increase versus a year ago. Continued weakness is seen in the European markets, while Middle East, Asia and North Africa are taking advantage of relatively cheap prices.

On the flip side, commitments showed a big drop from last month, shedding about 80 million pounds to 280.5 million. This is not surprising given the quiet market over the past few weeks. From the commitment and shipment numbers May sales can be inferred at 38 million pounds, the lowest monthly level in about two years.

Dampened enthusiasm stems mainly from the NASS Subjective survey, which suggests a 2009 crop of 1.45 billion pounds. Following this announcement in early May, buyer confidence, which had picked up in April, disappeared quickly.

Weakness is mostly reflected in the heavily available standard 5% market, which has now shrunk back below $1.00 per lb. If some second-hand traders are to be believed, standards are now 90 to 95 cents. The larger California’s have been dragged lower as well, but not to the same extent. Nonpareils appear to be hanging in, but also amidst muted activity.

Strong shipments will eventually lift this market. The long-term fundamentals are bullish; cheap prices both historically and versus other nuts, consumption growth in the midst of a world recession, production increases starting to level off – the same old arguments that California has been reeling off for some time. For now, however, despite the record May shipment, the California Almond industry needs to get the uncertainty of the Objective Estimate behind them before buyers can be convinced that a drop to even lower levels is not imminent.

May 2009

Almond Shipments are showing a definite trend. February was up 35.5%, March jumped 16.7% and now April shipments are reported up 16.9% at 111.8 million pounds. Season-to-date shipments are now at 1030.4 million pounds, ahead of last year's pace by 6.2%. This is a remarkable change from the end of January when shipments were actually lagging behind previous season's levels. In addition to strong shipments, commitments at 361.4 million pounds indicate very strong sales in April of about 131.5 million pounds. April has not seen this kind of activity before. For comparison, the previous high for April sales was last April at 65 million pounds.

It is worth noting that low prices have beckoned buyers from around the world, with heightened activity in Middle East, Asia and North Africa. The glaring exception has been Europe (both East and West) where shipments are down nearly 10% from last year. The "emerging markets" typically buy for nearby shipment and we might expect continued strong demand from these buyers over the summer.

However the road to higher prices is not necessarily flat. Reports from Spain are indicating a strong crop. Then on Friday last week the NASS released the Subjective crop forecast at 1.45 billion pounds. This was outside the range of expectations and shocked the market into a standstill the past few days. The subjective estimate is a telephone survey of 275 growers, representing 23% of the crop. Preliminary bearing acreage is estimated at 710,000 acres. California sellers are scrambling to determine how this forecast materialized and what to make of it.

Before the NASS forecast, prices for standard had strengthened. This was from a low in February. There has been strong demand for nonpareil and anything that might pass as a substitute.

Now the industry juggles with the uncertainty of next years crop versus the relatively solid fact that demand for almonds continues to continues to power along, particularly at these prices. We believe strong shipments will have more bearing for now. There are too many unanswered questions about the NASS forecast. Consumption has been the key to price direction and will continue to be so. Certain items will continue to be short supply and some premiums will ratchet further. Standards and more plentifully supplied categories, however, will likely have their ambitions capped until we get more information about next year's crop. Despite strong shipments, there will still be close to a 450 million pound carryover. Buyers and sellers are well aware of this fact.

We will continue to keep you apprised of developments.

February 2009

Keeping one eye on the weather and the other on the shipment report, buyers seem to have continued to take advantage of bargain prices and have been purchasing the better grades, varieties and sizes at a brisk pace. Activity, however, has not yet been fully reflected in the shipment numbers - which for January were relatively dull at 92.6 million pounds, down from 97.1 million pounds a year ago. However, with the commitment number increasing significantly to 384.8 million pounds from 349.1 million last month, sales for January can be calculated at a healthy 128.3 million pounds.

Any excitement over sales, however, will be dampened by receipts which are still coming in strongly despite the lateness of the season. Another 83.4 million pounds showed up in January to bring the total to 1570.3 million pounds. The 2008 crop looks set to reach 1.6 billion before it's over. Perhaps this was what everyone really expected all along (not the 1.5 billion forecast), but the reality is a little sobering.

The market has shown a split personality the last few weeks. Demand for Nonpareils and the larger Californias have firmed prices for these items. Smaller Californias, however, which will find themselves sold in the standards and BWB's are in plentiful supply and the buyers know it. Consequently we still find the standard 5's trading near $1.15 per lb, while Nonpareils Supremes and Extras have moved higher.

The big question at this time of year of course is bloom. California has seen a series of cold fronts move though the past week bringing much needed moisture, particularly to the central and southern portion of the valley. It has been cold as well, piling snow in the mountains and delaying the onset of the nonpareil bloom. At this point we anticipate that the nonpareil bloom should start in about a week. In between now and then a least a couple of weather systems should bring more rain. After that, as bloom gets underway, we do not care to forecast, though some experts are calling for a continuation of unsettled conditions. We note however, that current wet conditions have not yet appreciably changed the outlook for many growers faced by severe water shortages - which could affect as much as 20% of the state almond acreage. The next several weeks of the rainy season will be critical for supplies.

In summary, the market is more confident than we have seen for several months. We see stable pricing for Californias, nonpareils heading higher and decent sales volume. Some of this can be attributed to bloom uncertainty, but the main driver is reemergence of demand. The initial shock of the financial crises is now over and the supply chain appears to be adjusting to the new realities. It feels like a floor has been set. At the same time, barring a mishap during bloom we do not see much chance of sharply higher prices, especially for the standards and lower end of the market.

January 2009

Thursday the Almond Board of California released the December 2008 shipment report at 93.6 million pounds, about even with last season's record 94.5 million pounds. Market expectations had been for a 10% decrease in month on month shipments so some would argue that this figure was somewhat surprising to some.

Crop receipts are at 1,486 billion pounds, in line with the CASS estimate of 1.5 billion. Shipment to date are 603 million pounds, up slightly from the record pace of last year. Commitments of 349 million pounds show the industry to be approaching 60% sold five months into the marketing year. Shipment numbers indicate that world almond demand is stable and should continue to grow.

Within the industry this is believed to be good considering all of the recent challenges, talk of recession, regulatory hurdles, and the stress that has gripped the people who are making tough decisions in an increasingly unstable business environment. Most expect stability and modest price increases leading up to Bloom as more and more activity returns to the market. Most believe, shipments should gain considerable strength into the spring and early summer.

December 2008

Yesterday the Almond Board of California released the November 2008 shipment report at some 118 million pounds, down about 11 million pounds from November of 2007. It clearly shows that all of the decline is from within the domestic market. Clearly a conservative approach to inventory levels is being demonstrated.

Some within the industry would point out that overall consumption though is not declining. Shipments to date are up slightly, 509 million vs. 506 last year, August to November; commitments are up slightly to 366 million, and the industry looks to be roughly 53% sold after four months.

Crop receipts are at 1.320 billion, in line with the estimate of 1.50 billion. Stocks will clearly be sufficient for world supply. Future discussions in relation to almond sales will be based on weather, and potential crop production into the early new year as bloom approaches: in the meantime buyers have been trying to avoid the circular firing squad in California where prices are lowered weekly and market confidence is given a final cigarette and a blindfold. We expect the downward trend to reverse itself in late January as pent up demand comes back to the market in advance of the 2009 bloom.

November 2008

Yesterday the monthly numbers were released and it showed that California shipped 157.6 million pounds in October, almost matching last October's all-time record monthly shipments of 159.9 million pounds. Making up for mostly lower exports to European destinations, Chinese shipments totaled a very strong 20 million pounds plus in October. Shipments to China for the first three months of the season are now up 129% over last year. Japanese shipments have also helped to shore things up for the Almonds seller as they are up 11% season to date at 10.5 million. On the other hand, Western Europe is down 12% for August through October. All in all shipments for the first three months are still ahead of last year's levels by 3.9%, but the lead is slipping and this is not where California would ideally like to be considering the size of the crop. Keep in mind that we believe total supply is going be up by 15% or more, depending on final crop size.

Although we cannot peg the size of the crop yet, the lack of bins and field-on-field comparisons suggest that 1.5 billion will be achieved and most likely surpassed. Receipts at the end of October totaled 1020 million pounds versus 997 million at the similar juncture a year ago.

Also somewhat uninspiring is the commitment number which is reported at 392 million, reflecting a drop of 56 million pounds since last month and is 20 million pounds lower than commitments at the same time last year. Using the commitment number, sales for the month can be computed and at roughly 92 million pounds -- markedly weaker than October sales in the past couple seasons. This is not surprising given the state of the world and the slackening demand situation for nearly all commodities.

The past month has seen almond prices show signs of erosion, particularly for the abundant lower end of the market usually purchased by the currently reluctant European buyers(standard 5s etc). Standard 5's are now trading close to $1.35 per lb. Nonpareils have fared a little better, but still have not been immune to the general weakness. Manufactured almonds (slice sliver) are now being offered at lower levels as well.

Understandably, buyers have been unwilling to take any big bets. In response to tightening credit, importers and distributors are reducing inventories where they can and are telling us that their retail customers are not pulling as anticipated. At the same time there are still sellers out there responding to demands of space, bins and grower payments. More sellers than buyers and prices go down. Is this going to change in the next month? Probably not. However, as we get through November and hullers begin to wind down we anticipate that selling pressure should ease. Handlers will have the crop tucked away and pressure to liquidate in time for end of year payments will have subsided. If sellers can exercise patience and adjust to the developing hand-to-mouth environment California can move this crop at current levels or better. At these levels the price of almonds is not impeding consumption. The key is restoring some confidence in the market which will then leave both sellers and buyers better off.

October 2008

Against a backdrop of troubled financial markets and wild currency swings, California shippers were active in September, dispatching a record 137.2 million pounds of almonds to domestic and export markets, this according to the shipment report released on Wednesday. This is up 12.5% from last September when 121.9 million pounds were shipped.

Although the total number seems to be impressive, very strong inshell shipments, primarily to India, accounted for just over 12 million pounds of the 15.3 million increase. India cannot be expected to repeat this performance in October. India used September to catch-up after a late harvest and lower than normal shipments in August. Total August and September Indian inshell shipments are now level with last year.

Strength is noted in China (August and September shipments more than doubling to 9.9 million pounds) and Russia (up over 80% at 3.8 million pounds). Of concern however, are Western Europe shipments which are flat compared to last years levels.

Almond handlers received about 440 million pounds of almonds in September, bringing total receipts to 554 million pounds at the end of the month. September receipts were about equal with last year. Total receipts, however, are still behind last year's levels which were at 593 million pounds at the end of September. This is a reflection of the late crop and NOT of the crop size.

Total commitments at 457 million pounds are nearly 90 million pounds ahead of a year ago levels, but this needs to be viewed in the light of a higher carryout and bigger crop. As a percentage of total supply, commitments plus shipments are at 41% of anticipated supply - about at the same level as last year when about 40% of the supply had been committed.

Although generally under pressure during the past month, almond prices have seen some areas of relative strength - particularly for sized goods. Looking forward it is difficult to forecast direction over the short-term. Buyers have been hampered by currency fluctuations, tightening credit and uncertain consumer reaction to economic troubles. On the other hand, California sellers are seeing prices close to cost of production and resisting moves to push levels lower. Shipments are still robust and almonds are relatively cheap both historically and compared to other nuts. Looking to 2009 already the market is figuring a 10 cent premium to next year's crop as another bumper crop is unlikely.

Of note, that most believe if it weren't for current world economic troubles, they would be relatively confident forecasting a firming market for almonds. Better almond prices, however, may have to wait their turn for now. 

September 2008

After a late start California growers are now well into their nonpareil harvest and in some areas pollinators are making their way through the huller shellers. Most growers are reporting better than expected yields. Buyers, hearing the good news from the orchard, are for the most part sitting on their hands and prices have consequently been flat and in some cases weakened.

The August shipping number is about as expected given a late start to the season. August shipments were reported at a total of 96.7 million pounds, up about 2.1% from shipments of 94.7 million a year ago. Domestic shipments were slightly off and kernel exports were well ahead of last year's pace. The main area of weakness is Indian inshell shipments which only totaled 8.8 million versus 15.4 million in August last year. Weakness here is attributed to harvest timing.

Commitments are reported at 396 million pounds, up strongly from 282 million at this time last year, but not remarkable when compared to past seasons. Commitments and shipments currently account for about 29% of the projected supply. The industry has seen end August numbers from 25% to 38% over the past several years.

Although 20/22's are still in scarce supply, the sizing from the nonpareil crop so far is about the same as last season and not quite as small as some in the industry had earlier feared. There is a concentration of 25/27's and 27/30. and as a result we are seeing pricing pressure on smaller nonpareils. This is also reflected in the pollinators, with standards slipping by nearly 10 cents since last month.

So for now Almonds are coming in and sellers need to turn product for space and cash reasons. Those who did not sell over the past few months are now trying to make up for lost ground in a questionable market. This could turn around once they have a more concrete idea of crop size instead of just scattered reports of good yields. Also, everyone will have a better sense shipment strength after September numbers. Strong shipments have been key to the market over the past years and despite problems in the world economy it is not expected that demand will slow on a dime - especially at these prices. Sellers who can wait now probably will. Meanwhile there are enough that will continue to request and drive the market towards the lowering bids. We will see.

Late July 2008

Year-to-date shipments are now 18% ahead of the prior season and it appears the carry-over number (inventory at the end of July) will end up in the 210 to 215 million pound range. Now with a 1500 million pound crop on the horizon, California will have to keep shipments growing at a 15% pace to keep the July 2009 carryover at a similar level. Even a 10% increase in shipments will leave California in a tenable position. Given shipment performance of the past year, many believe that this seems quite workable.

In the wake of the June 30th objective forecast, which put the crop at 1500 million pounds, several trading concerns have tried to coax prices lower. Standards which were traded in the $1.75 to $1.80 range prior to the forecast were being bid at $1.60. It is not thought that much business transacted at these lower levels. Nonpareils were also off by about 10 cents, with most buyers trying with little success to secure the larger sizes after the objective report warned of smaller nuts. Manufactured almonds were a mixed bag with most sellers holding at $2.50 to $2.55 for ABC's.

The key to market pricing continues to be shipments. With the sustained trend that California has posted over the past year it is hard to argue a sudden drop-off. Of course there are risks - the domestic market looks lackluster, the currency may start working against California, global economic climates may cool and leave consumers cutting back on more expensive items. But at this point it seems that downside for prices is limited and any hiccup in supply will send prices sharply higher. Even without a supply worry, sellers will now likely hold off until prices move back into the ranges seen prior to the objective report.

July 2008

According to the “Objective Forecast” released, the 2008 almond crop is forecast at 1.50 billion pounds.  This up from the subjective forecast of 1.46 billion released in May.

The number is seen as within expectations.  Over the past 18 seasons, eleven times the objective forecast has been too low, in five instances the forecast has been too high, and twice it has been spot on.  See the table below.

Since 2002, the era of billion pound plus crops, only once (2004 season) has the NASS overestimated crop.

Perhaps this year again the forecast will predict the correct direction; that is if the objective was bigger than the subjective then the final crop was an even bigger number and visa versa.  This has been true the past seven seasons.

The average nut set per tree was counted at 7,452 for all varieties, up slightly over 7,413 nuts per tree last year.  Nonpareil average nut set was counted at 7,079 nuts versus 7,067 nuts last year.  Also of interest is that the nonpareil average kernel weight is reported at 1.55 grams, down from last year’s 1.61 grams.   Perhaps larger sizes will be another challenge this year.

We will continue to keep you up to date with developments. 

NASS Forecasts

 

 

 

Crop

Subjective

Objective

Actual

Obj. vs Actual

1990

640

655

655

0.00%

1991

450

460

489

6.30%

1992

570

550

545

-0.91%

1993

520

470

488

3.83%

1994

610

640

732

14.38%

1995

430

310

366

18.06%

1996

520

530

507

-4.34%

1997

710

680

752

10.59%

1998

550

540

517

-4.26%

1999

760

830

830

0.00%

2000

675

640

698

9.06%

2001

875

850

824

-3.06%

2002

940

980

1084

10.61%

2003

920

1000

1033

3.30%

2004

1100

1080

998

-7.59%

2005

850

880

912

3.64%

2006

1020

1050

1113

6.00%

2007

1310

1330

1377

3.53%

2008

1460

1500

 

 

June 2008

Almond exports continue to sizzle as we enter the heat of summer (up 39% for May versus last year), while the domestic market seems to be taking a breather (May numbers down about 11% versus last year). Taken together, total May shipments were reported at 88.5 million pounds, up 15.4% over last May shipments of 76.7 million pounds. This keeps the total shipments year-to-date at a respectable 17.2% over the prior season.

The position report shows committed sales at 223.1 million pounds. By comparison, last year the committed number was at 134 million pounds at the same time. Although some of these commitments have been made for next season, there is no disputing that this is a strong number and that California growers are in a comfortable position. With strong commitments and enough available product to meet early season demand we anticipate that shipments should end the last two months of the season on a strong note.

At the time of last month’s report the market was just starting to digest a bullish shipment report (April up 34%) and a bearish subjective crop estimate (1.46 billion pounds). Bulls are enjoying a slight advantage for now. They are being helped by alarming news from the Westlands Water District where growers have seen a cut in their water allocation due to drought conditions. About 60 to 70 thousand almond acres are believed to be affected, with growers not getting enough water to finish off the crop.

Nonpareils have been squeezed for current crop, with buyers wanting prompt shipment for Ramadan and struggling to find sizes and quality. Going forward it appears that strong shipments and crop concerns will keep prices firm. This should likely continue until at least June 30th when the objective crop estimate is released.

May 2008

The last couple days have highlighted the major theme of the almond industry; bigger crops and correspondingly strong demand. Wednesday the Subjective crop forecast by NASS put the 2008 crop at 1.46 billion pounds. This number is at least 60 million pounds more than most of the talk and 165 million pounds more than the early estimate put out by a group of traders. Today April shipments were reported at 95.6 million pounds, shattering previous records and an inspiring 34.4% over April's performance. Season-to-date shipments now stand at 970.4 million pounds and 17.6% ahead of last year.

Under any other circumstances a subjective estimate such as yesterdays would be sure to knock the wind out of sellers, but with shipments rolling like a steam train it is not so certain. Here is a supply- demand scenario:

Shipments continue at a very modest 15% increase over last year for the remaining three months of the season. 2007 season shipments end at about 1248 million pounds. The carry-in to 2008 season will then calculate at 224 million pounds.

2008 Season

 

224

Projected Carry-in

1460

Crop

 

43.8

3% loss

 

1,640

Total Supply

 

 

 

1,372

Shipments with 10% growth

268

next carry out

 

 

 

1435

Shipments at 15% growth

205

next carry out

The ability of California to ship strongly has been clearly demonstrated over the past years. If all things remain equal - affordable almonds, weak dollar, increasing buying power in India and China, continued strong health messaging - then 15% is not an unreasonable expectation and perhaps consumption slows to 10% growth if pricing puts the brakes on. All in all, the supply demand situation looks quite manageable even if the actual crop does come in as high as the recent forecast. A carry-out of 200 to 250 million pounds on shipments of 1.4 billion pounds is nothing to be afraid of.

The market over the past few weeks has strengthened for the nonpareils as certain sizes seem to have dried up. Current crop NPS 27/30 which had traded as low at $2.05 to $2.10 was seen in the $2.25 to $2.30 range just before the estimate and buyers were struggling to find offers. As always happens, the category that was thought to be in short supply at the beginning of the season was emerging more readily towards the end of the season and NPS 20/22 was being bought between $2.50 and $2.55 - slightly down from levels seen earlier.

It will take a few days for the market to digest these numbers, while most items will be lower they may not be as cheap as initial buyer reaction would suggest. Only time will tell. season

End April 2008

The subjective almond forecast has been released, projecting the 2008 almond crop at 1.46 billion pounds. See the attachment for details. The forecast implies an average yield of 2210 lbs per acre from 660,000 bearing acres, only slightly down from last season's 2,240 lbs per acre.

The Nass track record has been pretty good the past several years. See the table below.

Crop

Subjective

Objective

Actual

Obj. vs
Actual

1990

640

655

655

0.00%

1991

450

460

489

6.30%

1992

570

550

545

-0.91%

1993

520

470

488

3.83%

1994

610

640

732

14.38%

1995

430

310

366

18.06%

1996

520

530

507

-4.34%

1997

710

680

752

10.59%

1998

550

540

517

-4.26%

1999

760

830

830

0.00%

2000

675

640

698

9.06%

2001

875

850

824

-3.06%

2002

940

980

1084

10.61%

2003

920

1000

1033

3.30%

2004

1100

1080

998

-7.59%

2005

850

880

912

3.64%

2006

1020

1050

1113

6.00%

2007 1310 1330 1377 3.53%

2008

1310

????

????

 

Today the shipment number will be released for April. At that time we will make a comment on the market.
Click HERE to
view the 2008 N.A.S.S. California Almond Forecast report.

March 2008

February shipments were reported at 85.97 million pounds, up over 17% from last February's total of 73.07 million. Rightly or not, there were expectations that perhaps February would be closer to 100 million pounds and this report will likely do little to lift the current mood.

With an additional 20 million pounds of receipts that were reported during February, unshipped inventory is at 685.5 million pounds, about 189 million pounds more than at the same time a year ago. Even if California ships at an unprecedented 100 million pounds per month, there will still be close to 200 million pounds of carry over. A more realistic forecast of shipments increasing at 18% per month will project the carryover at 233 million pounds.

Commitments at 303.5 million pounds show a decrease of 25 million pounds since last report. Sold and committed for the 2007 crop year supply is at about 74% of total. This compares to 77% at the same time last year.

Although prices jumped a little higher after last shipment report, with the onset of sunny and warm conditions in California about two weeks ago sellers have been prepared to do business at lower levels. New crop levels are similar to current crop for standards. However, in expectation of better sizes from next crop, NPS 23/25 is being discounted compared to current crop.

In light of the falling dollar, almond prices are very reasonable, dare we say cheap. However, this fact alone will not be enough to sway sentiment over the next few weeks. Bulls hope now that cheap prices will encourage even stronger shipments. There is also talk as bloom recedes and nutlets emerge it may reveal that trees do need a rest after the bumper 2007 crop and that great bloom conditions do not necessarily mean another record crop. For now, however, there appear to be ample sellers not willing to take that bet.

February 2008

Almonds shipments appear to have recovered momentum lost in December and posted a record January of 97.12 million pounds. This up 14 % from shipments of 85.2 million pounds in January last year and is bigger than most had expected as the talk was that shipment in January would be hampered by vessel availability and a weakening market.

The other bullish surprise is the committed inventory number which climbed since last month to 328.9 million pounds despite heavy shipments. The numbers suggest new sales of 122 million, which is unusually strong for the month of January.

Receipts are nearing the end of the season about as expected. Important to note is that January added another 43.3 million pounds to bring the total to 1.357 billion pounds. This year the tail of the crop is a little fatter than usual, with a few southern hullers taking their time to finish off.

Bloom is around the corner. After a series of wet storms, the weather in California has cleared over the past couple of days. Temperatures close to 70 degrees are forecast for the weekend, which should help to move things along. However, it is still too early to predict bloom weather, which will be more critical toward the latter part of February. For what it is worth, long range forecasters have decided that February will be "unsettled".

Prices in January slipped after traders took advantage of December's unexciting shipments. This report released will possibly counter the weakening shipment argument. However, despite shipments regaining momentum, it is clear that there will be plenty of almonds to get the industry through to next crop. Even if shipments maintain a 14% increased pace the carry-out will still be well over 200 million pounds (compared to 133 million pounds at the end of last season). Consequently, it is not expected that prices in general and in particular prices for smaller sizes, will squeeze dramatically higher.

January 2008

Although a record shipment month was again posted in December, the total of 94.5 million pounds only just squeaked past last December’s total of 94.2 million.   Domestic shipments were in fact down by nearly 6 million pounds at 23.9 million and the shortfall had to be made up by exports.

At the same time sales have been slow - even by December standards. Forward commitments have dropped by 42 million pounds to a total of 303.5 million pounds, suggesting sales of only 52 million pounds in December.

On the supply side it still appears that California is on track for a total of a little over 1350 million pounds. Receipts at the end of December totaled 1314 million pounds. Although receipts slowed in December to 82 million pounds, typically another 3% to 5% of the crop comes in after the end of the calendar year. This year shouldn't be any different. We are told as you drive around the southern valley, one still sees the occasional stockpiles still waiting for hulling.

Over the past month, prices were little changed in a quiet market.

The December position report may be the crack in the armor of strong shipments that the buyers have been waiting for. It appears that there will be enough supply to get them through to next crop and buyers will probably delay concluding purchases. However, size will become an increasingly important issue in the months ahead and though pricing pressure might be expected on smaller kernels the 27/30's and larger should better maintain value.

November 2007

Shipments in November were reported yesterday at another record breaking amt of 129.5 million pounds, up 16.2% over last November's shipments of 111.5 million. Cumulative August through November shipments are now 76 million pounds ahead of last year's pace and total 506.2 million pounds.

Receipts added another 235 million pounds in November and now total 1,231 million pounds. Typically another 10% or so of the crop comes in after November -- in 2003 it was 11.5%, in 2004 it was 8.7%, in 2005 it was 9.9% and last season, which was a late crop, 15.6% was reported after the November number. If another 10% is added then the final crop comes out to 1354 million pounds -- not too far off the CASS estimate.

Commitments dropped from 411 million pounds last month to 345 million pounds for this report. Its believed that the drop in commitments reflects a slower pace of selling in November, which is no surprise.

Prices have backed off the past few weeks as buying out of the major importing countries (particularly Europe) has slackened. At the same time there have been sellers in California that appear to be motivated to enter the new year with a little better sold position. Most of the pressure has been on the pollinator side of the market, while nonpareils have only backed off more modestly from previous levels.

It should be noted that mid-November through mid January is typically a slow time for sales. Unfortunately, slow sales at this time of year are not unusual. In this environment a few anxious sellers can sometimes move the market lower.

This latest report, however, will most likely remind sellers that they can afford to wait for buyers to come back to the table for first and second quarter needs. The pace of shipments is eating up additional almonds expected from the bumper crop. The dollar remains weak with no expectations for this to change in the near-term. Given a comfortably sold position, strong momentum in shipments and a competitively priced product versus other nuts its anticipate that prices will hold at today's levels.

October 2007

Despite concerns about pasteurization, California has another month of record shipments under its belt. September shipments for domestic and export set new records and totaled a combined 121.9 million pounds versus 110.4 million pounds a year ago. So for the first two months of the year shipments are at 216.6 million pounds - up 27% compared to last year. Although shipments to every region were strong, of note are 14.8 million kernel pounds of inshell exports primarily to India. For the first two months of the year India has bought 27.1 million pounds, compared to 15.7 million in 2006. India is now the leading export destination for California almonds.

Commitments are strong as well. Total commitments stand at 370 million pounds, up 65 million pounds at the end of September last year. Shipments plus commitments stand at 587 million pounds. Assuming the crop comes in at the forecast 1.33 billion and adjusting for a 3% loss then California is 46% sold - a relatively comfortable position for this time of year.

Receipts to date are reported at 593 million pounds, up from 406 million a year ago. Receipts increased by a massive 439 million pounds in September. This figure is more a measure of hulling and shelling capacity than of crop size. Sizes continue to run small, particularly in the south. Thus far weather conditions have been favorable for harvest, with only one rain event that slowed things down in the field. Growers are now shaking the last of the Fritz and hoping for enough warmth over the next couple of weeks to get everything out of the orchard and to huller stockpiles. It is still too early to forecast the crop size, but there has been enough talk of disappointing yields in the south that a crop much larger than the CASS forecast of 1.33 billion will be a surprise.

Prices over the past month have reflected a multifaceted market. Anything with size has maintained value. All in all there seems to be very little weakness in this position report. Also remember that competing nuts are relatively expensive. Almonds by comparison give an impression of inexpensive and buyers will likely continue to buy strongly at current levels. So for at least another month firm prices are expected until we see the October shipment numbers. October shipments last year were 150.4 million pounds and California cannot hope to surpass this hurdle by very much, but even getting close should keep the momentum.

September 2007

Some of this increase we believe was the result of inventory building prior to the commencement of the new September 1st pasteurization protocols, but in general it continues the trend of surging worldwide almond consumption. (The regions not affected by the new requirements also showed healthy shipment gains, and committed shipments are up 14% year on year.) Notable shipments in particular were strong Indian in-shell shipments (15.4 million pounds versus 3.1 million a year ago), Spanish imports (10.1 million versus 4.1 million) and domestic shipments (34.8 million versus 27.2 million last August).

In addition to very strong shipments, forward sales are also well ahead of last years levels, with Commitments reported at 282 million compared to 238 million.

Reflecting an earlier crop than last year receipts were noted at 153.7 million pounds, compared to 43.5 million by the end of August last year. This number is not without precedent (in 2004 149 million lbs were received in August) and at this stage gives few clues as to size of the crop. So far the crop looks relatively clean of insect damage (nonpareils reported at 1.59% average damage). Sizes, however, are a challenge. Big sizes are very scarce. For many growers 25% or more of the nonpareils have come in smaller than size 32, which will reduce the salable nonpareil supply (and correspondingly increase the supply of blanchable standards).

With today's shipment announcement sellers are going to want a little more. There is no downside in waiting for a few days before selling further and perhaps the market moves 5 to 10 cents per lb. Anything with size will definitely maintain value. This would include the blanched sliced and slivered which will need the larger end of the spectrum as input. The bottom end of the market will likely be more sluggish as small sizes crowd into sales of standard 5%.

We expect the trend of rising shipments to continue into bloom: production capacity is filling in quickly for the critical September/October shipping periods and interest is forming for the 1st quarter of 2008. For all of the reasons we have mentioned in past reports such as the current value pricing of almonds, weak dollar exchange, strong consumer awareness and growing demand for product, it becomes difficult to avoid drawing conclusions on future price movements.

August 2007

Yesterday the Almond Board released the July 2007 shipment report at 82 million pounds, a new record and above July 2006 by some 37%, a significant figure to be sure. Year to date: crop shipments reached 1.066 billion pounds, up 17% year on year.

August of 2007 will also set a new record, despite the apparent delay in harvest due to cooler than expected weather. A huge piece of uncertainty in the market was recently removed by the delay of the mandated pasteurizing process in the domestic USA until March of 2008, clearing the way for continued shipment growth. The combined factors of a weak dollar, continued value pricing of almonds and a substantially growing world demand for product some could say argues well for a stable to rising market in the coming months. Market sentiment, often more powerful than statistical figures will slowly adjust itself to the present realities of growing demand.

End June 2007 ** Objective Estimate Released **

The CASS reported the 2007 crop estimate Friday at 1.330 billion pounds based on bearing acreage of 615,000 lbs. This is up 19% over last year's crop and up 2% over the Subjective Estimate released in May. The average nut set per tree is reported to be up 10% from last season second highest since 2002 and nut size is down from last year by 6%. Nonpareil, which was expected to be lighter than the other varieties has an average nut set up only 3% from last season. There also appears to be a reduction in doubles which is welcome, but could still be better in this category, overall quality seems to be good.

The following figures show the CASS forecasts over the past 17 seasons. Over the past five seasons they have underestimated the crop four times, perhaps a result of the difficulty in fully accounting for the expanding acreage. It is not an easy task.

One observation, for what it is worth. Over the past six seasons the objective forecast has forecast the correct direction; that is if the objective was bigger than the subjective then the final crop was an even bigger number and visa versa.

Crop

Subjective

Objective

Actual

Obj. vs
Actual

1990

640

655

655

0.00%

1991

450

460

489

6.30%

1992

570

550

545

-0.91%

1993

520

470

488

3.83%

1994

610

640

732

14.38%

1995

430

310

366

18.06%

1996

520

530

507

-4.34%

1997

710

680

752

10.59%

1998

550

540

517

-4.26%

1999

760

830

830

0.00%

2000

675

640

698

9.06%

2001

875

850

824

-3.06%

2002

940

980

1084

10.61%

2003

920

1000

1033

3.30%

2004

1100

1080

998

-7.59%

2005

850

880

912

3.64%

2006

1020

1050

1113

6.00%

2007

1310

1330

????

 

A large 2007 crop is needed to expand markets as new acreage comes into production over the next few years.  Shipments for the 2006 crop remain strong and domestic shipments continue to impress everyone with 8 of 9 months achieving new records.  Current crop depletion of several California-type sizes is apparent, as availability becomes tighter.  Nonpareil Variety is more abundant, with smaller sizes easily obtained.  A new record will be set for total shipments and the fact remains that there is almost 3 months until new crop California-type varieties are readily available for shipment.  A firming trend for current crop will spawn confidence in California Growers and start controlled firming in new crop pricing.

For more information you can visit the N.A.S.S. report at:
http://www..almondboard.com/files/2007%20objective.pdf 

June 2007

May shipments were released last week and they have been reported at 76.7 million pounds, down about 4% from last May when shipments totaled 79.9 million pounds. May numbers were helped via shipments in the domestic market (31.0 million pounds versus 26.9 million pounds a year ago). Exports, however, were relatively weak at a total of 45.6 million pounds versus 52.9 million a year ago.

All in all the shipment number is about as expected. To date California has shipped 901 million pounds, leaving about 290 million pounds left. Even if California ships at the same pace at last year in June and July there will still be a carry-over of about 150 million pounds. This is enough to reassure buyers that they do not have to worry about running out of product before the record 2007 crop starts to become available. The weak market is reflecting that reality.

Current crop prices have softened considerably over the past month as buyers have held off and sellers try to ease out of 2006 inventories.

New crop levels have held up a little better and have only dropped about 10 cents or so. Buyers are still waiting on the side for the most part as they hear glowing reports about the 2007 crop.

Prices, particular in terms of Euros, are relatively cheap and probably low enough to encourage the boost in consumption that is needed to move the necessary additional 150 million pounds next season. However, most believe the market is not going to be convinced until we actually see the movement in terms of shipping numbers. This may take until the fourth quarter to be realized. Until then it is a buyers market and are likely to play it for all it is worth.

May 2007

Shipments CASS Estimate released today at 1.31 - Wednesday May 9th 2007

The initial forecast for the 2007 California almond production is 1.31 billion pounds. This is 17 percent above last year's revised production of 1.12 billion pounds. Estimated bearing acreage for 2007 is 615 thousand. This forecast is based on a telephone survey conducted April 23 - May 2 from a sample of almond growers. Of the 470 growers sampled, 340 reported. Acreage from these reports accounted for 27 percent of the total bearing acreage. The California 2007 almond set looks very strong. There was no difficulty accumulating chill hours over the winter, and there was a sufficient bee presence in orchards during pollination. In general, California weather cooperated during pollination. Some almond tree limbs are reported to be bowing and splitting under the weight of the heavy set. Throughout the Central Valley, the set of the popular Nonpareil variety is uniformly heavy.

April 2007

Shipments for the month of March were reported at 70.562 million pounds, bringing total shipments for the season to 753.9 million pounds. Last March shipments were 81.355 million and total shipments were at 623.6 million pounds.

So March shipments dropped by about 11 million pounds. After reviewing the numbers, it appears that all of the decline plus a few million can be attributed to weaker export numbers as March domestic shipments were nearly 3 million pounds ahead of last year's pace.

At the same time, reported commitments dropped about 50 million pounds to 183.65 million pounds. This infers that only about 21 million pounds of new sales were made in March - (last March sales were at 74 million pounds using the same computation).

March exports will likely be viewed as a weakness in the seller's armor and we can expect buyers and traders to try chipping away at prices. Nevertheless, California remains in a comfortably sold position with nearly 88 % of the available supply shipped or committed. This compares to about 90% at the same time last year. Another way of looking at it is to note the Uncommitted Inventory at 248 million pounds and assume about a 120 million pound carry over - leaving only about 130 million pounds to be sold between now and the end of July. In addition, the fact remains that certain varieties, sizes and grades will be in short supply until next crop arrives, which should keep specific premiums supported.

Out in the orchards the developing 2007 crop has enjoyed mild weather and is developing well. New crop still continues to trade at a 30 to 40 cent discount to prompt shipment values. The Subjective Estimate will be released on May 9th.

For current crop, the next few months will be a game of who can last the longest as players figure out if there is enough supply to get through to new crop. It would seem that the ball has just bounced in the buyers favor as there is little in this report that will cause buyers to panic. Sellers, however, will not likely be convinced by one month of weaker shipments and will want to see a discernible trend before letting go of the reins.

March 2007

February shipments which were released this first wee Feb and were reported at 73.0 million pounds, about 17% up from February shipment last year of 62.1 million pounds. Cumulative August through February shipments are at 683.4 million, up about 26% from 542.2 million during the same period a year ago. Another 9 million pounds of crop receipts dribbled in during February, pushing the total receipt number to just over 1.100 million pounds.

Reported commitments dropped only about 20 million pounds from last month to 232 million pounds – suggesting sales of about 52 million pounds in February.

Most would believe that there is not much left of the 2006 crop to sell – about 150 million pounds and 5 months left to sell it in. California is actually in a better sold position than they were at the same time a year ago when about 170 million pounds were still left unsold at the end of February.

As discussed last month, a year ago the market rose sharply in March through June. However, we believe there is not as much potential for a repeat performance. Firstly, bloom conditions this year were on average a lot better (particularly in the south). Also, March through June shipments last year were very strong, totaling 312 million pounds, versus 267 million pounds in 2005. Most likely the comparison of 2007 versus 2006 is not going to look as robust.

Nevertheless, with all the good shipment news we can expect that current crop should hold value for the next several months at least as the last of the 2006 crop is rationed out. Certain items such as larger nonpareil extras will be scarce and eventually unavailable. This is a concern with Ramadan coming early this year and needing supplies out of current crop.

With the bloom done, there is consensus that there will be a better crop than last year. Although it is much to early to forecast, figures being bandied about range between 1.2 and 1.25 million pounds. The overwhelming opinion is that the nonpareil crop will be off between 10% and 20% from last year.

February 2007

Almond shipments continue with January reported at a record high of 85.2 million pounds. January shipments a year ago were 63.3 million pounds. August through January shipments stand at 610.3 million pounds, up from 480.1 million in the same period a year ago.

Crop receipts added another 36.8 million pounds bringing the total to 1092 million pounds, confirming that this is the largest crop ever.

Sales were also strong (about 77 million pounds) and so the Committed Shipments number only dropped a few million pounds to 253 million. At this time last year Committed Shipments were at 182 million pounds. The Uncommitted Inventory (which includes carryover) stands at 308 million pounds versus 337 million pounds a year ago.

All this begs the comparison with last year with regards to price movement. At this time last year prices were at similar levels. After the bloom (which was not perfect) and an increase in shipment pace from March forward, prices climbed another 50 to 80 cents as supplies tightened.

Will we see the same thing this summer? The potential is there. There is just enough supply to ship at the same pace as we did last spring and summer, but no room for increase at the kind of levels we have seen the past 6 months. However, last year rain during bloom and cold weather afterwards put the whole market in a bullish mood. Good bloom conditions (if they materialize) will dampen enthusiasm to run prices to the same levels we saw last summer.

Prices took a slight dip about two weeks ago as send-hand profit-taking caused some softening. This appears to be over now and current crop prices were again firm just before the Position Report.

Bloom is expected in the next few weeks. At this stage there has not been much progress and due to the cold, dry winter trees are waking up more slowly than usual. There is talk of a wet spring caused by El Nino conditions and as we speak there are wet, cold fronts lined up over the growing regions. Nevertheless, it is still too early to impact bloom and growers will likely welcome the additional moisture over the next couple of weeks.

January 2007

Almond shipments ended the calendar year on a strong note with 94.1 million pounds reported today for December. This compares to last years December of 76.3 million pounds. Season to date shipments are now 26% ahead of last year's pace (525.1 million pounds versus 416.7 million) and more in line with shipment seen for the 2004 crop.

Crop receipts added another 115.6 million pounds in December and were reported at an end December total of 1055.1 million pounds. December receipts were 40 to 50 million pounds heavier than seen in the past few seasons. Over the past couple of seasons another 25 to 30 million pounds has trickled in over the remaining months, so a final crop number of close to 1080 million pounds would not surprise. This will be about 3% more than had been forecast by CASS.

Commitments were reported at 260.9 million pounds, compared to 189.5 million a year ago. The change in the commitment number shows that sales of approximately 94 million pounds were made in December. Adding commitments to cumulative shipments through December puts California at about 75% committed and shipped (assuming a 1080 million crop). This compares to 68% at the same time last year and will be a comfortable position for California sellers.

Strong demand for Nonpareil, particularly from India and Middle East, have pushed prices to hefty premiums over California varieties. Hard to find larger sizes are trading as high as $3.00 per lb. Blanchable standards are seen in the $2.40 to $2.45 range, about 10 cents higher than a month ago. Blanched and manufactured almond prices are between $3.05 and $3.15.

Strong shipments and sales in December will most likely continue to keep the market supported. The slightly higher than expected crop will help meet the needs of continued strong demand, but is not likely to dampen prices at this stage. The gorilla in the room will be bloom, which by next report should be just about to start. However, with California appearing to have very little left to sell, a good bloom could have a muted effect on 2006 crop pricing. There are still 7 ½ months before new crop becomes available.

There is one item of note that has the potential to alter the landscape. Last week The EU Food and Veterinary Office released its findings from it aflatoxin fact finding mission back in September 2006. The report found insufficient aflatoxin controls in California and recommended 100% aflatoxin screening at European port on all shipments not being tested under a Voluntary Aflatoxin Sampling Program (VASP). Shipments under the VASP program were recommended to be tested at a 5% level (1 in 20 containers). Even a 5% level of testing is a significant jump in the scrutiny level and increases the risk for aflatoxin rejection. A vote on the recommendations will take place on January 15th, but it looks likely to pass. The new conditions will cause a scramble of activity in California with handlers and laboratories trying to figure out the new conditions. Additional costs and delays are guaranteed.

December 2006

Almonds continue to ship at a brisk pace according to Industry Reports. California November shipments were reported today to have totaled 111.5 million pounds, up from 89.5 million a year ago November. The strong number was expected, with much of the talk ranging from 110 to 115 million pounds.

Commitments were reported at a 260.4 million pounds, showing sales of 92 million pounds for November. Usually November sales are around 60 to 70 million pounds. Commitments plus shipments are at 691 million pounds – about 69% of supply. With roughly 30% of the crop uncommitted, California sellers are seen in a comfortable position.

On the supply side, receipts were reported at 939.7 million pounds and reflects an increase of 217 million pounds in November. It is difficult to forecast the crop from the November receipt number, but it seems reasonable that that there might be about 100 million pounds left to be reported (during the past three seasons crop receipts after November totaled 119 million in 2003, 87 million in 2004 and 90 million in 2005.) Another 100 million pounds of receipts would put the total crop at 1040 million pounds -- right at current expectations.

Based on the current numbers, there would not be enough almonds if shipments were to continue at the same pace as we have seen over the first four months of the season. However, almonds are now about 40 cents per pound higher than at the beginning of the season and price and typically slower sales in December and January should start to put the brakes on. Buyers have not panicked up to now, and will likely continue to wait to see the bloom instead of rushing to cover 100% of needs for the rest of the year. Consequently, we anticipate stable pricing until we move into the bloom market.

November 2006

October shipments were reported today at a record 150.3 million pounds, up from 11i.9 million a year ago October. The previous monthly shipping record was October 2003 at 144.9 million pounds – a number that was pumped up by a port strike the month before that delayed shipments. Strong shipments were anticipated and this report is seen as satisfying even the most optimistic observers. All markets appear to have contributed to the strength, with domestic shipments totaling 43.9 million pounds versus 33.9 million last October. Export inshell shipments at 10.5 million pounds showed a continuation of strength from September and more than doubled last October shipments.

Receipts were reported at 721.83 million pounds, up from 665.0 million at the same time last year. Receipts appear to be tracking numbers seen in 2003 when the final crop ended at 1033 million pounds. There are too many assumptions in forecasting the crop number from the October receipt number to confidently predict the crop at this stage. The October receipt number is more a reflection of crop timing and industry hulling capacity and speed.
Reported commitments were reported at 279 million pounds, compared to 233 million pounds a year ago at this time. The change in commitments and shipments suggest sales of 124 million for the month, reflecting a very active spot market. Commitments plus shipments are at 599 million, just under 60% of the available supply. This compares to 54% at this time a year ago and is more on track with levels seen in 2003 and 2004.
Almond prices have been relatively stable the past month, again with prompt business dominating the landscape. Buyers continue to be wary to commit further out.

With November starting to look like another busy shipping month and 60% of the supply already committed it appears likely that sellers will have renewed confidence to feed the hand-to-mouth business at prices of their choosing and not worry about putting business on the books for further out. Buyers, particularly in Europe, will continue to put off purchases as long as possible as they hope for a break later on. However, if November comes in strong as well, easier prices may have to wait for good bloom weather.

Mid October 2006

The Almond Hullers and Processors released their second 2006 estimate this morning.  The AHPA forecast is an extrapolation of voluntarily submitted information from various hullers that compare same field yields versus the previous crop year. 

 Last month the AHPA surprised the market with a larger than anticipated nonpareil forecast at 448 million pounds.  Today the nonpareil forecast has been lowered slightly to 437 million pounds.

 Other varieties, which have been the main question mark over the past several weeks, are forecast at 605 million pounds, well off the CASS estimate of 672 million pounds and even lower than last season’s crop.

 This is the “final” AHPA forecast, and the total crop is put at 1042 million pounds – about in line with the total CASS number of 1050 million pounds.

 Following the September position report earlier this week, the market firmed by about 5 cents for pollinators and perhaps a little less for Nonpareils.  The last couple of days, however, have not shown any follow-through…perhaps with both sides waiting to see the result of the AHPA survey. 

The table below summarizes the 2006 AHPA forecasts and compares them to the CASS 2006 forecast and the Actual 2005 crop.

  

NP

Other

Total

 

 

 

 

2006 CASS Obj.

378

672

1050

AHPA Sep 15th

448

672

1120

AHPA Oct 13th

437

605

1042

 

 

 

 

2005 Actual

282

629

911

 

 

 

 

AHPA vs 2005

55.0%

-3.8%

14.4%

October 2006

September shipments were reported today at 110.37 million pounds, compared to 81.5 million pounds in September last year. September was anticipated to be strong and the report does not surprise, nor does it disappoint. To put the number in context, there were 112 and 114 million pounds shipped in 2002 and 2004, respectively. From what we are being told and from what we have been seeing so far, October shipments should be very healthy as well, with the industry on track to move the 2006 crop, which is now anticipated near 1.1 billion pounds.

Crop receipts were reported at 406.2 million pounds, with 362 million pounds being added in September. This shows hullers and shellers working briskly through the crop and eclipses the previous strongest receipt month by 10 million pounds (352 million pounds were reported in September 2003).

Commitments were reported at 305 million pounds. The change in commitments and shipments this month suggest that sales of 177 million pounds were made in September, most of which is believed to be for sales that are mostly concentrated in the October – December period. Adding commitment to shipments, estimating the crop at 1.1 billion and assuming a similar carryout – (yes, we know this is a lot of guesswork) California is sold and shipped at about 44%. This is lower than usual for this time of year.

Almond prices appeared to bottom about 2 ½ weeks ago and then moved higher in anticipation of today’s report and the AHPA number coming on Friday. Strength on the lower end of the market (Standard 5’s and California’s) was more pronounced than for Nonpareils. A wave of European interest was behind the surge. Nonpareils have seen more modest increases.

There are lingering concerns about the size of the pollinator crop. The AHPA number, which is scheduled to be released on Friday, will be widely anticipated.

For a full reporting of the shipment Numbers visit: 
http://www.almondboard.com/files/PDFs/2006%2E092.pdf 

September 2006

August shipments were reported today at 58.71 million pounds, up slightly from last August shipment of 57.440 million. Last August however the crop was earlier (61.4 million pounds of receipts reported last August versus 43.567 million this August) and there was about 25 million more pounds of carryover crop to work with. Decent numbers, but most will wait to see September shipment numbers before casting judgment on new crop demand.

Nonpareils are now moving from fields, through hullers and shellers and into the market place. Sizes are smaller than last year. From what seems to be being reported is that most nuts are falling into the 25/27 and 27/30 categories. We are seeing about 15% to 20% in the 23/25 range, with very few almonds bigger than this. On the other end of the spectrum only about 10% of the nonpareil are smaller than 27/30. Nuts are generally plump and color is good. Insect damage has been variable from field to field. Yields in general have not disappointed.

The
position report shows Committed Shipments at 238.5 million (click here to read it). Adding August shipments to this number and assuming the 1050 million pound objective forecast is close to reality, the report indicates that California is about 29% sold. This is a relatively low sold position, but comes as no surprise as buyers have been reluctant book further out. There is still a lot of business to be done. Sellers saw strong buying emerge when the market dipped earlier this year, we think that again this will be the case, but it does not seem that we are there yet.

August 2006

July shipments were reported at an unsurprising 60.2 million pounds, up from 54.8 million pounds a year ago. The final month of shipments for the 2005 crop leaves the carryout into the 2006 crop at an official 98.7 million pounds. As both buyers and sellers know, this is about as low as the inventory can go.

Shaking has begun in the south – about a week later than last year. It is too early to make any crop predictions other than the nuts are smaller than last year. Early blocks are usually small, but field reports indicate that small sizes will be produced from later blocks as well. For now it is not anticipated that the extremely hot weather seen in mid-July will have a significant adverse impact on the crop.

In a very thinly traded market (the change of commitments and shipping numbers show that only 22.3 million pounds of current crop were sold in July) current crop prices have slipped, while new crop has held relatively steady. It is reported that European buyers have been noticeably absent.

New Crop Sellers are being careful not to offer bigger sizes and the premium for early shipment is shrinking as sellers emerge as they get a better handle on early availability. New crop standards are trading between $2.10 and $2.15 for October and later. This is about 10 cents lower than a month ago.

For prices to move appreciably higher will need negative crop news and/or stronger than anticipated shipments. However, it will be quite some time before gauging 2006 shipment strength (probably have to wait for September numbers) and bad crop news will likely have to wait until after the nonpareils. Indications at this stage suggest new crop prices settling into a trading range – which would be a welcome change to all from the wild ride of the past year.

July 2006

Shipments for June were reported at 80.4 million pounds, up from 66.1 million pounds a year ago. With domestic shipments essentially flat, the entire increase can be attributed to an increase in export shipments.

Another very strong number is the Committed Shipments reported at 95.7 million pounds, which points to another strong shipment number in July. If a conservative 70 million pounds of these commitments are shipped in July the carryout will be an extremely skinny at approximatly 88 million pounds.

Following yesterday’s announcement of the 2006 crop Objective Estimate at an unsurprising 1050 million pounds there has been very little reaction from the market. All in all the supply/demand scenario does not point to a clear direction for new crop. Using the 1050 million pound number there will be about 140 million more lbs of crop. However, the carry-in to the 2006 season will be about 50 million pounds less than last season. So in effect there will be about 90 million more pounds of supply from California – about 9 % more than last year. At this time last year almond prices were over $4.00 for NPS for example, while today new crop NPS is offered at $2.60 to $2.70. Is this low enough to generate an additional 9 % demand? Probably so, and particularly likely in light of the weaker dollar. At the same time Spanish crop looks better than last year – which will add to supply.

So as we go into the new season, again the focus will be on demand (shipping numbers). Current crop will have a life of its own for the next several weeks at least. Those buyers that still need to cover will be forced to pay higher prices and there does not appear to be enough inventory left to cause any undue selling pressure. It will be a difficult transition to new crop.

For the new crop, sellers will want to be sold before next spring and we anticipate steady selling between now and November. This does not necessarily mean a weak market as strong shipments may give sellers enough ammunition to keep the market firm as they get to more comfortably sold positions

For a full reporting of the shipment Numbers visit: 
http://www.almondboard.com/files/PDFs/2006.06.pdf

July 6th, 2006

California's 2006 almond Objective Estimate was released today and production is forecast to be at 1,050 million meat pounds, up 3 percent from May's subjective forecast of 1.02 billion pounds and 15 percent above last year's crop. The forecast is based on 580 thousand bearing acres. Production for the Nonpareil variety is forecast at 378 million meat pounds, 34 percent above last year’s deliveries. The Nonpareil variety represents 36 percent of California’s total almond production.

Nonpareil, Butte and Padres are reported to have a strong set, while the California’s are reported to be spotty. Average nut set per tree is up 23% from 2005. Nonpareil nut set is up 47%. So expect smaller sizes.

The number provides few surprises. It was widely expected that the crop would be between 1000 and 1100 million pounds. Focus will now shift again to shipments, with the June numbers due to be released tomorrow.

Current crop is extremely tight and continues at about a dollar premium to new crop values. This premium will likely continue for a few weeks, particularly if the trend of strong shipments continues with the June figure.

June 2006

The most recent Almond Shipment numbers strength continues to surprise. May shipments were reported at 79.88 million pounds up more than 12 million pounds over last May’s total of 67.33 million. This is the third straight month of strong shipment and reflects the strong underlying demand for almonds after prices adjusted lower from record highs.

The other number we believe is worth noting is the committed inventory of 129.3 million pounds – this indicates shipments of about 65 million pounds per month for June and July even if no more sales were made – this would be 10 million pounds higher than shipments for last June and July. It also shows that if no further sales were made then carry-out for July 31st will be at 109 million pounds (an extremely low number considering that 2006 crop might be later than usual and very little new crop may be available to ship in August). All in all the transition to new crop will be difficult to say the least, despite the Spanish crop, which looks decent.

Since last month prices for current crop have steadily climbed, primarily driven by European trying to buy increasing hard to find standard 5’s. There has been some concern that much of this was short-covering, but there is no doubt that there has been strong underlying industrial demand as well. The change in commitment numbers show roughly 52 million pounds were sold in May – a strong number for this time of year.

The latest shipment information will most likely continue to force current crop levels even higher. To what level we do not know. It should be noted, however, that sellers are running out of time to capitalize on the current crop premium. The new crop will eventually be here, even though it seems a long way off today.

May 10, 2006

The May 10, 2006 subjective forecast for the 2006 almond crop is 1.02 billion pounds, shelled basis, according to the National Agricultural Statistics Service - California Field Office (NASS/CFO). The forecast is based on a survey of growers by NASS/CFO.

The 2006 estimate is up 12% from the 2005 crop of approximately 911 million pounds to-date. NASS/CFO forecasts the 2006 bearing acreage to be  580,000 acres.

 

    NASS/CFO Almond Crop Estimate vs. Actual Receipts

Million Pounds

 Crop Year

Subjective

Forecast

Objective

Forecast

 Final

 1996-1997

520 

530

508

 1997-1998

710

680

757

 1998-1999

550 

540

517

 1999-2000

760 

830

830

 2000-2001

675

 640 

698

 2001-2002

875

850

824

 2002-2003

940 

980

 1,084

 2003-2004

920 

1,000

 1,033

 2004-2005

1,100

1,080

998

 2005-2006

850

880

911 to-date

 2006-2007

 1,020

 TBD

 TBD

The Objective Measurement Survey, which uses sample almond counts to forecast the crop, is scheduled to be released on Thursday, June 29, 2006, at 12:00 p.m. at the Almond Board.

Early May 2006

Good shipments for April were anticipated and the final result of 70.2 million pounds versus 58.1 million a year ago lived up to expectations. This is the second month of strong shipments and the market is taking notice. Concerns for tightness over the summer months have driven current crop prices to steep premiums over new crop. Ahead of the number, NPS 23/25 AOL prices for prompt shipment were trading in the $2.80 to $2.85 range, while new crop continues between $2.20 and $2.30. Standards for current crop have moved above $2.45 while new crop is being bid at $1.80 per lb.

The concerns can be considered justified. Computed inventory at 318 million minus expected carryout of 130 million leaved 188 million to be shipped in the next 3 to 3 ½ months (remember the 2006 crop may be late). This means only 54 million lbs per month. Last year the May July shipments averaged 72 million lbs. The industry is seeing strong export demand leading up to the position report as industry has sought cover for summer shipments. A good crop in Spain should help to ease the late summer transition in Europe, but nevertheless things will still be tight and first new crop shipments will be at a premium.

The change in commitments and shipping numbers show sales of 53.6 million pounds in April, up from 43.6 million April last year. From what we have seen so far, strong sales are expected to continue into May.
Expectations for a stronger 2006 crop should keep current crop upside potential limited. At some point buyers will prefer to wait rather than pay the current crop premium. If the SUBJECTIVE estimate (due out tomorrow) comes in stronger than expected we could see some new crop relief. We are told trees look heavy and as a result most of the feeling is that a number between 1 billion and 1.050 million is being anticipated.

March 2006

The Almond Industry February position report released today showed signs of shipments regaining momentum. Last month the industry shipped 62.152 million pounds, down 10% from shipments of 69.038 million pounds a year ago. The 10% decline in shipments is a notable improvement – the previous three months showed declines of approximately 20%. Perhaps it is too early to call this a trend, but if we see shipment momentum continued in March the market will be forced to take note. From what is being reported in sales and demand for prompt shipment there is a good chance that March could be a decent number.

The change in reported commitments shows sales last month of 60.1 million pounds, well up from last February of 37.65 million. This number is no surprise given the prompt buying activity over the past several weeks.

Crop receipts are now totaling 907.9 million pounds, reflecting an additional 9.1 million pounds during February.

Almond prices jumped higher after the freezing conditions about three weeks ago. Most items added about 30 cents per pound. About 10 to 15 cents of the gains were given up however, as sellers emerged on the sunny days that followed. Over the past couple days, concerns have been raised about the potential for freezing conditions over the weekend. Couple the cold concerns with the supportive position report and most sellers have now backed off. Damaging freeze will send the market higher, with very little chance of short-term downside should the freeze not materialize.

It will likely take till early April before the industry can truly note the nut-set. Until then there may be enough uncertainty in the market to keep prices supported.

End February 2006

Prices in the past week have moved up about $0.25 cents per pound on current crop across the board – and still few sellers. As weather conditions show some improvement over both the San Joaquin and Sacramento Valleys with Thursday and Yesterday being the warmest since the middle of last week, pricing pressure is most likely going to be up over the next few weeks until more is know about the new crop situation.

Temperatures climbed well into the 60's in all areas, with portions of the Northern San Joaquin and all of the Sacramento Valley having highs in the 70's. The combination of the hard frost last week, and the continued cool mornings has truly slowed down the Nonpareil Bloom over much of the Valley with most areas know in the Full Bloom Stage, with some Petal Fall in portions of the Sacramento Valley.

Bee Flight hours are now fairly close to, or greatly exceed the totals of last year's short bloom. Just for reference, a Bee Flight Hour is defined as a daylight hour with the air temperature 55 F or higher, with no rain, and winds less than 15 mph. The greatest increase in flight hours, relative to last year is now in the Southern San Joaquin Valley. Rapid increases are expected in all areas the next 3 days with close to ideal conditions in many areas with the exception of the cold mornings, which will delay some bee activity.

Bee Flight hours will increase by as much as 7 a day through the rest of the weekend as a dry ridge of high pressure holds over the Valley during this period of full bloom. The warmer conditions will accelerate the bloom again and most areas are expected to enter into the Petal Fall phase by the end of this upcoming weekend.

There has been some talk about an upcoming weather change with another round of frost and doom. We would tell you to take it as just conversation. Yes, the forecast is for increasing chances of some rainfall over much of the San Joaquin and Sacramento Valleys as early as Monday, and more so late in the week. Cooler conditions will accompany the rainfall, but this is a much warmer "core" storm system and the weather service says no frost is likely. Daytime temperatures will fall into the mid 50's to lower 60's for much of next week, possibly cooler in the Sacramento Valley. The impact will be mainly on the later blooming varieties in most areas, and even then it should be marginal. The coolest and potentially wettest conditions are likely late next week and into next weekend, then a slow return to warmer and dry conditions by the second week of March.

The bottom line is that there is no real way to evaluate the damage caused by frost but bloom maturity will surely be influenced with 100% damage expected in some orchards.

February 2006

The January 2006 position report showed the following:

Crop receipts:                          898.8 million pounds versus 988.4 million last year (down 9.1%)
January Shipments:                 63.3 million versus 77.6 million a year ago (down 18.4%)
August- Jan Shipments:           480.0 million versus 593.4 million a year ago (down 19.1%)
Committed, not shipped:          182.7 million versus 231.3 million a year ago

The continued slowdown in shipments is the main concern in this most recent report. Domestic (US) shipments contributed to the weakness, with January shipments of 20.9 million, down from 24.2 million a year ago. This is the second straight month of slower domestic shipments.

As we know, over the past month prices have continued to decline. Defaults have added pressure to prices as high priced containers have been left unpaid at the port and have had to find new homes. The list of defaulting buyers grows every week.

The effect has been that lower prices have encouraged some buying activity. Buyers are now looking at reduced downside risk and are more willing to commit. Also almonds are now less expensive than competing nuts and current wholesale prices translate to price points that are known to work at the retail level.

The bloom is now the main focus for the next few weeks. So far the weather looks good, but we are only at the very beginning and there is still time for adverse conditions to develop. In anticipation of a stronger 2006 crop, new crop is being discounted by about 25 to 30 cents to current crop.

Given the uncertainty of bloom and the additional uncertainty caused by the defaults no one can predict prices for the short-term. But at this stage, we believe that the upside price risk should bloom be disappointing is greater than the downside risk should bloom weather prove cooperative.

January 2006

The current almond market has become quite different from that experienced and reported earlier in the season. In general, prices have fallen more than 30% from their previous highs. As a result, most buyers have been buying slowly and are only covering their short-term needs. In turn, this has caused some growers and processors to become anxious to sell fearing inventories out way current demand.

The Almond Industry Position Report released this week indicated 2005 shipments were down 14 % compared to last year. It also confirmed what most in the industry believe that the crop receipts had moved above the objective estimate for the year of 880 million pounds. This means that the final crop should reach between 890 and 900 million pounds. That is almost 100 million more pounds available to sell than what was believe to be available earlier in the season.

In the unsettled market we are currently experiencing, there will be no magic moment as to when the market has peaked or bottomed out. Therefore, it is important for everyone in the industry to be realistic about current conditions.
We now have more than seven months left in this season before the arrival of the 2006 crop. Additionally last year at this same time computed inventories and market prices were nearly the same as they are today – last year, rather than go down, prices surged dramatically to the upside. If a problem develops during the bloom, the possibility of this happening again cannot be ruled out.

What are not known at this time is how the 2006 crop bloom will progress and what the eventual outturn of the 2006 crop will be. It could be a bumper crop or it could be a bust if wet and warm weather conditions prevail. It is also not known when buyers will determine it is in their best interests to cover their requirements for the season. Will they decide at some point to come out in force or will they continue to buy on a hand-to-mouth basis? And of course, we must consider the consumer – who was hit with higher retail prices and has already begun to shift their eating patterns.

Looking forward it is felt that purchasing at today’s price levels can be considered a realistic option for buyers because it can result in a reasonable average for the season. Buying hand-to-mouth remains an alternative. In either case, the entire 2005 crop will most likely be sold. And, if steady shipments continue at 85% of last year as they have for the last three months, the end result will be a manageable carryout similar to the last two years.

December 2005

With nearly 9 months to go in the 2005 crop season and most buyers following a hand-to-mouth purchasing strategy, the November Shipments report again shows another month of fewer shipments compared to the same period last year. November was about 90 million pounds, 13% less than last year.

At the end of November, crop receipts are nearly complete some maybe as high as 90 plus percent received. The November Almond Board report places receipts to date at 820 million pounds. With most Huller/Sheller’s having shut down early, it can be concluded that the 2005 crop will come in below the CASS objective estimate of 880 million pounds.

The next series of critical market information will be generated by the prevailing weather during the bloom and the first unofficial crop estimates that will follow in March 2006. This sets the stage for those perceiving a bumper crop to try and push prices down. In the meantime, growers and handlers in California have the option to accept the lower prices that have appeared recently, or, to be patient sellers and wait until more is known about the potential 2006 crop and the direction of the market during the intervening months.

October 2005

Total shipments for October 2005 were 111.9 million lbs, down 17.9 m lbs., or 13.8% versus last year and down 33 m lbs., or 22.8% versus October 2003. Domestic shipments were 34.0 m lbs, down 750 k lbs, or 2.2% vs. Year ago. Export shipments were 77.9 m lbs, down 17.2 m lbs, or 18% vs. a Year ago. Shipments for the first three months of the 2005/06 crop year total 250.9 m lbs, down 72.3 m lbs, or 22.4% vs. last year. Domestic shipments are down 10.4% and export shipments are down 27.4% for the year.

Forward reported commitments (representing 87% of the crop) now stand at 233.5 m lbs; down 25.7% versus last year indicating to us that buyers continue employing a “hand to mouth” strategy. Of the year to date shipments of 250.9 m lbs, 519.3 m lbs are already spoken for, representing approximately 52.9% of the predicted 2005/06 supply. For reference, at this time last year 684.2 m lbs, representing 61% of the available supply, were shipped and committed.

Crop receipts to date total 665.1 m lbs, down 11.6% versus last year. Applying a 5 year average of 76.1% of the crop received by the end of October, the final 2005 crop would total approximately 874 m lbs, close to the CASS Objective Estimate of 880 m lbs. However; based on crop size, some industry participants are advocating using 2001/02 as a comparative for this year. In 2001/02, the crop was 824.1 m lbs and 81.5% of the crop was in by the end of October. This would indicate a possible 2005 crop of only 816.1 m lbs.

As for the market itself, it continued to weaken over the last month with prices dropping $.15-.40/lb depending on the grade. Some traders and handlers have been aggressive sellers while other handlers have resisted selling, choosing instead to wait until more sizing and crop size details are known.

The dollar reached a 2-year high against the euro this week and has strengthened 10% in the last 6 months and 16.7% since the low set at the end of 2004. With climbing US interest rates and political uncertainty in Europe, the dollar is likely to continue strengthening, thus mitigating some of the benefits of lower priced almonds in the export market where two thirds of California production ends up.

End September 2005

The August ’05 industry shipment numbers were released and it was 57.4 million pounds, which was 21.2 million less than last years level of 78.7 million pounds (-27%).  Although down from last year, overall shipments were 17 million higher than the California Industry had expected.

August ‘05 Domestic Shipments were down by 4.8 million

     (- 16.4%) vs..  the prior year.

August ’05 Export Shipments were down by 16.4 million   

     (- 33.4%) in comparison to last year.

It is felt that the overall reduction in shipments for August was more a factor of a lack of supply as opposed to reduced demand.

Prices have remained relatively stable since early August of ’05 due to lack of activity caused by buyers on holiday and packers without available inventory to sell.  Recent weeks have shown a $0.05/lb increase in price resulting from buyers returning to the market and the realization of the sellers that the crop is coming in shorter than expected. 

World wide Spanish supplies were available earlier than normal due to the drought, but overall quality has been very poor (small sizes, shriveled nuts).  European buyers looking for lower prices and ready availability took advantage of Spain’s cheaper offers to fulfill their early requirements.  Since the Spanish crop is not expected to exceed 35,000 MT (77 million pounds), due to the severe drought during the growing season, it is expected that most of their supplies will be exhausted by the end of October 2005.

It is important to not that although the CASS estimate in late June predicted the 2005 Almond crop would be 880 million pounds, crop receipts over the past 30 days show the crop trending well below that figure.  Highlights are as follows:

            Cass Forecast: Nonpareil would be off 21% statewide from CY’04. 

            Actual Trend:  Nonpareil are off 20-25% in the southern valley (where the best crops had set) and 35 – 55% off in the central region (60% of the crop).  It is expected that overall, the Nonpareil crop will come in 30% smaller than in CY’04.

Cass Forecast: Pollinator varieties would be off 6.5% statewide from CY’04. 

            Actual Trend:  Only information from the southern region is available but yields so far are off 15-20% ( again where the best crops had set). It is expected that overall, the pollinators will come in 15% smaller than in CY’04.

Overall:  The 2005 crop is expected to be off by 20% totaling 798 million pounds. 

Other Crop Attributes seen so far:

            Higher Insect Damage:  Actual damage running 100% higher than last year (double).

            Large Nut Sizes:  Largest on Record for Nonpareil (96% of the nuts sizing 23/25 AOL).

Overall demand has really picked up in all markets since the beginning of September.  It is expected that pricing will firm and rise over the next several weeks.  Shipments in September looks to be very strong as of the 14th of the month.  Overall, it is expected that September shipments to be at least 27% less than last year due to supply shortages caused by the delayed harvest.  Pollinators from new crop are still not available and CY’04 carryout is completely depleted.

September 2005

California almond farmers reported last week that their crop looks lighter than current estimates. Government forecasters predict farmers will harvest 880 million pound of almonds, but growers (Hullers and Shellers) say weather and insects have reduced the crop. Rain at bloom time during the spring hampered pollination of the main almond variety. Then a hot July took a further toll. Experts say it is too soon to say how much lighter the crop may be, but most agree it won't be a calamity, but yet it continues to effect price offers.

June 30, 2005 Objective Almond Forecast Released

The June 30, 2005 objective almond forecast for the 2005-2006 crop year is 880 million meat pounds, according to the California Agricultural Statistics Service (CASS). This forecast is based on 550,000 bearing acres.

Gary Nelson of CASS said the forecast is up 3.5 percent from the May 11, 2005 subjective forecast of 850 million meat pounds and down 11.8 percent from this year’s crop to date of 998 million pounds as of May 31, 2005. The official announcement was made today at the Modesto office of the Almond Board of California, which funds the forecast.

The average nut set per tree is 5,461, down 23.8 percent from the 2004 almond crop. The Nonpareil average nut set of 4,650 represents a 30.3 percent decrease from last year’s set. The average kernel weight for all varieties sampled was 1.79 grams, up 23.4 percent from last year.

June 2005

This year is being called the year of the Perfect Storm in the California almond industry. 

An unprecedented fourth billion-pound crop was too much to ask of Mother Nature and as a result California had lousy pollination and even post-bloom weather, reducing this year’s much needed billion pounds by at least 150-million pounds.

The initial subjective California Agricultural Statistics Service (CASS) forecast released on May 11 was 850 million pounds from 550,000 bearing acreage. This is a 16 percent reduction from the 2004 crop from basically the same bearing acreage. The objective measurement survey is scheduled to be released June 30.

However, record prices will be set for a fourth straight year, but many believe they are simply too high, and will undoubtedly set back the market demand.

Almonds have evolved to the fourth highest value crop in California at $2.03 billion. Even though the crop will be short this year, it should not lose its standing with a crop value of about $2.5 billion.

The value of California almonds has increased 2,435 percent since 1970 even though acreage is up 224 percent, yield 117 percent and production up by a 602 percent.

Almonds are a worldwide commodity and 70 percent to 75 percent of California’s crop is exported. It is the largest exported value crop in the state at $1.3 billion.  Fortunately, the world market will get some relief from the California shortfall.  Spain has much better crop this year than it had last year. It should be about 120 million pounds. Last year it was a disaster in Spain with a freeze reducing production to only 33 million pounds.

The challenge this year will be to mollify California almond customers and try to reassure them that 2006 production should replenish supplies.  There is a tremendous backlash going on in the trade right now that is threatening to kill a big part of retail market.  It is being reported that big chains are not accepting today’s higher prices.  Almonds are a key ingredient in many new products developed in recent years, and this short crop will be a setback in continuing that growth.

Most expect almond product makers to unfortunately reduce advertising and promotion to throttle back growing demand. He said others will look at reducing the quantity of almonds in products like cereals and candy. Others could completely eliminate almonds from the ingredient mix.

Losing loyal customers with a pair of bad crops could spell economic disaster for the future as There is a huge wave of new almond supplies expected starting in ‘07 and building to 2010.  Some are projecting bearing acreage could be 730,000 acres by 2010, one third more bearing acreage than today.  The 2010 crop could easily total 1.5-billion pounds by then, almost double what is expected to be produced this year.

A good crop is needed again in 2006 to mitigate any harm the industry will experience in the marketplace with the high price for ‘05 almonds.  That alone will be another challenge for Mother Nature since there are only about 15,000 acres of new almonds coming into production next season.

The acreage gap falling behind demand is because almond prices were so low in 1999, 2000 and 2001 that there was no incentive to plant more trees. Growers were paid so poorly during those years that the supply needed today is simply not here.

The overall hope is that California almonds, already the benefactor of positive health news from eating almonds, could get even better news in the future when those big crops arrive.

Late May 2005

For the 2005 crop year, California’s crop is forecast to decline by 150 million pounds from 2004. Fortunately, the Spanish almond crop is predicted to nearly quadruple, increasing by approximately 95 million pounds. The Spanish crop appears to have recovered from last year’s devastating frost. However, the continuing drought in Spain may well deflate some of the anticipated increase before harvest. The 2005 world almond supply will decline for the third straight year dropping another 6%. Overall, 2005 supply will be 14% below the record set in 2002. The supply reduction appears more dramatic looking from California’s perspective. The 2005 California supply is expected to be approximately 16% below last year.

Assuming shipments in the current crop year reach one billion pounds, next year California shipments will be limited to approximately 850 million pounds. Under these circumstances a reduction in world consumption is not an option – it is a necessity. Supplies are simply insufficient to cover recent market demand levels.

Given the shortage of supply, higher prices become the mechanism for allocating available supply. Moreover, market prices today are providing growers with a good return on investment that is encouraging them to plant more almonds.

The impact of bearing acres will begin to be noticed in 2007 and more dramatically with the 2008 crop year and beyond. By 2010, bearing acres are expected to exceed 730,000 acres, a one-third increase over the total bearing acres existing today. Due to the smaller 2005 world almond supply, the remarkable 24-year average annual consumption growth rate at 5.7% cannot be sustained. And while price will choke off some demand, we can only hope that consumption will rebound quickly when supplies become available. Although relief may come with a better 2006 California crop, it may not be until the end of the decade when the historical consumption growth rate trend can resume.

In summary, the following outlook applies for the 2005 crop:
• California supplies will be down by approximately 16% from the 2004 crop year.
• World supplies will be down approximately 6%.
• Almond users that rely completely on California product will face a significant shortfall in availability, particularly in the case of Nonpareil.
• World consumption will be constrained by inadequate supplies for the second consecutive year.
• California almond shipments will drop to approximately 850 million pounds, which is 17% below the 2003 peak.
• Market prices will continue to reflect the substantial shortfall in world and California supplies.

Mid May 2005

Subjective Almond Crop Forecast Issued

The May 11, 2005 subjective forecast for the 2005 almond crop is 850 million pounds, shelled basis, according to the California Agricultural Statistics Service (CASS). The forecast is based on a survey of growers by CASS.

The 2005 estimate is down 15% from the 2004 crop of approximately 998 million pounds to-date. CASS forecasts the 2005 bearing acreage to be 550,000 acres. To access the 2004 California Almond Acreage Report released by CASS.

The Objective Measurement Survey, which uses sample almond counts to forecast the crop, is scheduled to be released on Thursday, June 30, 2005, at 12:00 p.m. at the Almond Board of California conference room in Modesto, California.

January 2005

The Almond Board Position Report for December confirms shipments during December of 89 million pounds, approximately 5 % below December of last year. This decrease partially offsets the 7% increase in shipments experienced during November. At the same time, it also places 2004 crop year-to-date shipments at 515.8 million pounds. This means industry shipments should remain approximately 3% ahead of the pace last year that ultimately set an all-time record for shipments during the 2003 crop season.

In the domestic market, net year-to-date shipments of 155.1 million pounds are up 13 % over year ago, while in the export market, shipments of 360.7 million pounds are off by about 1%. The significant gain in the domestic market can be attributed to across-the-board increases in shelled, manufactured and inshell almonds sold to customers intent on buying early and maximizing consumption. The marginal decline in export shipments involves lower deliveries to Asia, where buyers are showing the first signs of price resistance. Shipments to the important Western European market are virtually identical to last year. While there have been noticeable changes in shipments to particular countries within the European Union, these changes are not particularly meaningful as indicators of shifts in the European market. They have more to do with the ever-increasing ease with which goods can be landed in one country and quickly shipped to end users in neighboring countries.

At the outset of the season the California Agricultural Statistics Service (CASS) published a crop forecast of 1.080 billion pounds. Based on the just released California Almond Board statistics for December, 2004 crop receipts of 969.9 million pounds suggest a final crop size of about 1 billion pounds. This strengthens the belief of many in the industry that a crop shortfall will impede shipments later in the season and reduce the forecasted carryout. The scenario just described is already being reflected in the marketplace in the form of high differential pricing for late 2004 crop shipment positions and lower prices for early 2005 crop shipment positions.

With regard to sales strategies during December, origin handlers were generally reluctant or unwilling to make offers despite the high prevailing prices. In many cases this was because handlers were sufficiently well sold that they deemed it prudent to wait and sell closer to the 2005 crop bloom period. This reluctance to sell, coupled with the traditional absence of buyers during the period leading up to the Christmas holidays, meant that trading in December was limited.

During December the Dollar continued its slide against the Euro, losing 7.1% for the year. The Dollar posted some gains at the beginning of January after U.S. Treasury secretary, John Snow, announced he intends to do take some steps to sustain the strength of the dollar. If buyers perceive the Dollar has bottomed out, it could spark some near term buying interest in export markets. If the Dollar were to strengthen dramatically it could dampen the willingness of export markets to pay the high prices that prevail in the current market.

December 2004

November 2004 shipments were 103.39 million pounds, an increase of about 7% from the November 2003 shipments of 96.759 million pounds. Receipts through November 2004 were 910.7 million pounds, down compared to last year. Remember that this year’s crop was early which could account for the strong shipment number. The industry received 149 million lbs in August as opposed to 46 million lbs during August 2003. Looking at the past 6 seasons, the industry received on average 91.5% of the crop through November. This year it could appear that they have already accounted for 96% of the crop, as was the case during the 2000 / 2001 season. Some might say the crop is going to be closer to 950 million lbs. These recent industry numbers today validate that type of thinking. Best-case scenario, assuming that the industry has only received 87.9% of the crop, that still puts the crop at 1.036 billion lbs. This is still about 50 million lbs short of the CASS estimate.

Shipments to date for the 2004 crop year are 4.77% ahead of last year. Domestic shipments are up 16% and even export shipments are up 0.62%. The increases in price through November have not slowed down shipments. On the contrary, they are running ahead of last year. We believe the full extent of the recent price increases will not be felt for another few months.

The actual Supply is where the true questions lie:

Carry-in from last year              148.9 million lbs
Projected Crop Receipts           950 million lbs
Less 4% loss / exempt             (38 million lbs)
Total supply                             1.06 billion lbs
Less shipments to date             (426.578 million lbs)
Less reasonable carry-out          (140 million lbs)
Less committed inventory          (274.978 million lbs)
Supply remaining:                     218.4 million lbs

Even assuming that the committed inventory number is not accurate, or is sold to re-sellers we are still looking at a very tight supply picture with 8 months of shipments still ahead of us. If we completely ignore the committed inventory segment, we have a remaining availability of 493 million lbs after we account for a 140 million pound carryout. This means 61.75 million pounds per month for the rest of the season. Last year, the industry shipped an average of 77 million pounds during this 8-month period. So shipments have to come down by 20% a month compared to last season if we want a carry out of 140 million lbs. If shipments stay on last year's pace of 77 million lbs per month, the industry will have no almonds left by August. Zero carryout, which simply put the industry will not allow to happen.

Some positive news is that most of the European countries are down. France is about the same as last year, as is Germany and Greece. Spain is down nearly 8%. In Eastern Europe, virtually all countries except for Russia and Lithuania are down. The Czech Republic is down 2.1 million lbs - an amazing 63%. In the Middle East, the United Arab Emirates is the savior, up over 4 million lbs or about 60%. Cyprus is up but all the other markets are down. Saudi Arabia is down over 40%. In Asia the shipments are more balanced. Singapore, S. Korea, Taiwan and Thailand are all up. In shell to India is up 25%. But in shell and shelled shipments to China are down considerably, as are shipments to Japan.

It is believed that countries like Spain, Germany, Holland and Italy, all have more buying to do. It appears they have in recent days taken more January and February positions, but March onwards is still mostly uncovered. Those almonds are going to have to come from this crop

Market factors are bullish. Absent an unexpected strengthening in the dollar, it is unlikely that anything of enough consequence will happen between now and new crop to reverse this bullish trend. December is in all likelihood going to be a strong shipment month. If it only stays on last December's pace of 93.6 million pounds, we will have shipped a total of 520 million pounds in a crop that at its very best will barely make 1 billion pounds.

We are all experiencing a market where the consumption fundamentals have changed. More people around the world are eating almonds. One billion pounds of consumption is no longer an aberration, but rather has become the norm. Even at higher prices, people are choosing to consume healthier products and this certainly includes almonds and other nuts. The Almond Board has done a fine job, as have people throughout the almond supply chain, in promoting almonds.

It is clear that going through a period of price readjustment is required before Almonds reach equilibrium between supply and demand. There will undoubtedly be a correction in the months and years ahead, once the increased new plantings come into production and they are faced with the projected 1.5 billion pounds by the 2009 season.

September 2004

Advance sales of 2004 crop by the industry in the months leading up to the harvest were fairly steady, however, during August, sales surged. This was due to the apparent readiness of many buyers to abandon self-proclaimed strategies of holding out for lower prices. As buyers came forward to cover their requirements, they were obliged to pay steadily increasing prices. By the end of August most growers and handlers seemed to be well satisfied with their early sales positions.

Due to strong sales, many sellers have decided it is prudent to evaluate the 2004 crop turnout in more detail before committing additional tonnage. This reduction in selling activity created additional upward price momentum. Whether this will continue or start to flatten out remains to be seen. A positive aspect of sellers taking time to gain a more detailed knowledge of the 2004 crop turnout is that the industry will be in a better position to serve key customers in the long crop year that still lies ahead.

The Huller Sheller Report, issued on September 3rd, estimated the crop at 1.070 billion pounds. This appears to largely corroborate the CASS estimate of 1.080 billion pounds announced at the end of June. Clearly, if strong global consumption continues, it is difficult for sellers to envision lower prices, especially in the short term.

Another factor, contributing to the inclination of sellers to wait before committing tonnage was the expectation that August shipments from California would once again rise into record territory. In the absence of any evidence to the contrary, most industry observers were of the belief that record August shipments would argue in favor of firmer prices, or at the very least a solidification of prices at current levels. On September 9th, the Almond Board announced that August shipments from California totaled 78.7 million pounds. This represents another record and eclipses the previous all-time record for August by more than 12 million pounds.

As a result of more buying interest, increasing seller caution, and the anticipation of record shipments, prices strengthened dramatically during August and the first week of September.

July 2004

Since our last update, three important events occurred. They were: the Almond Board of California announcement of June shipments from California, the California Statistical Service (CASS) Objective Crop Estimate, and USDA approval of an industry-wide plan to ensure that all almonds destined for raw consumption undergo some form of pasteurization.

June Shipments from California
June shipments from California were 73.7 million pounds, a quantity almost identical to the 73.9 million pounds reported for June of last year. With one month still to go in the 2003-2004 crop year, total shipments are already 949.9 million pounds. This means July shipments only need to be 50.1 million pounds to establish a new milestone for the industry in California -- shipments of 1 billion pounds. If in the month ahead the industry matches the 59.5 million pound shipment volume recorded last July, the billion pound mark should be easily exceeded.

2004 Objective Crop Estimate

On June 30th CASS reported that their objective estimate for the 2004 crop is 1.08 billion pounds. This figure is only marginally less than the CASS May 10th subjective estimate of 1.1 billion pounds. As a result, the reaction in world markets was limited. Origin prices that prevailed during the period leading up to the estimate remain largely unchanged. Attempts by some traders to solidify the market at lower price levels failed because California handlers largely remained on the sidelines.

With the announcement of the objective estimate and June shipments now known, buyers are in possession of nearly all of the important information they need to make there purchasing decisions. When the time comes, buyers from around the world will come forward and California handlers who are patient should be able to sell at prices determined in California not overseas.

USDA Approved Industry-Wide Action Plan 
The Almond Board of California has informed all almond handlers that USDA has reviewed and approved an action plan prepared by the Almond Board Food Quality and Safety Committee that is designed to eliminate consumer exposure to microbial contamination in almonds. This food safety program involves application of thermal processes, approved fumigants, or other technologies sufficient to achieve a 5-log reduction in bacteria on all almonds entering commerce. While the proposed plan is currently voluntary, efforts are underway to mandate full compliance before August 2005. FDA is reviewing current industry practices related to oil and dry roasting, blanching, scalding and drying, to validate these as a 5-log reduction processes. Because the strategic direction at Blue Diamond has been to maximize the production of high value added manufactured products; crucial roasting, blanching, scalding and drying processes are already in place and being used extensively at their facilities.

Almond Crop Objective Estimate Released June 30th, 2004

California's 2004 almond production is forecast at 1.08 billion meat pounds, down 2 percent from May's subjective forecast, but up 4 percent from last year's crop. The forecast is based on 550 thousand bearing acres. Production fro the Nonpareil variety is forecast at 390 million meat pounds, up 3 percent from last year's deliveries. The Nonpareil variety represents 36 percent of California's total almond production.

The almond bloom started in mid-February, and even through the heavy rain and wind, the bloom was very intense with both the variety and pollinators blooming together, which most likely helped the set. The bloom was strong, stayed on the trees longer than normal. This together with the warm weather in the beginning of March advanced crop development and the crop is currently ten days to two weeks ahead of normal. The kernel size appears to be about normal. The younger trees look to have a very good set.

Overall the crop appears to be fairly uniform throughout the state and growers expect to have a good crop.

Almond Crop Subjective Estimate Released May 10th, 2004

The initial forecast for the 2004 California almond production is 1,100
billion pounds. This is up 6 percent from last year's revised production of 1,040
billion pounds. Estimated bearing acreage for 2004 is 550 thousand.

This forecast is based on calls made April 22 - May 3 to a sample of almond
growers. Of the 420 growers sampled, 281 reports were usable. Acreage from the
usable reports accounted for 18 percent of the total bearing acreage.

The almond bloom started in mid-February. Growers thought heavy rains and
wind during the bloom may have affected bee activity and pollination. However,
the bloom was very intense with an excellent overlap of blooming varieties.
Bloom was strong and stayed on the trees for much longer than normal, which may
have been due to the cool, damp weather. Even the strong winds and heavy rain
in late February did not appear to affect the set. Some trees were reported
blown over by high winds, but total damage was minimal. Very warm weather in
early March advanced crop development, which is currently at least two weeks
ahead of normal. By early May, the kernels had already hardened in some
varieties, which is much earlier than normal. The kernel size appears to be about
normal. The younger trees seem to have a very good set. Growers indicated that
the Nonpareil crop may be a little below last year, but the other varieties have
a very heavy set. Overall, the crop appears to be fairly uniform throughout
the State and the growers expect to have a good crop.

April 2004

Industry shipments from California are nothing short of spectacular. March shipments were 82.0 million pounds.  This is 27 % greater than last March and double the historical average.  Because March is not a month normally associated with heavy shipments, this could be interpreted as strong evidence that consumption of California almonds remains on the rise.

Crop receipts that had ratcheted up last month by 1 % increased again this month, except at a lesser rate of ½ %.  Receipts to date now total 1.031 billion pounds. This quantity is expected to continue to inch-up slightly in future reports. However, with the industry firmly on track to ship more than 1 billion pounds this year, such increases are strongly desired. It is already widely anticipated there will be problems this summer matching customer needs with remaining supplies.

Overall, the ratio of shipments this year between domestic and export markets are roughly the same as last year.  Increases in the domestic market are driven by higher manufactured sales, and, increases in the export markets are the result of higher shelled almond sales.  As previously reported, short crops in the Mediterranean countries have fueled the increase in export shipments.  With serious frost damage to the 2004 crop in Spain now confirmed, the phenomenon of increased shelled almond shipments into the export sector will continue in the new season.  

The subjective CASS estimate, is due to be published on May 10th.  Most sellers in California appear to be waiting for this estimate before drawing further conclusions about sales strategies to follow for remaining quantities of 2003 crop and for the as yet undetermined quantities of 2004 crop.

March 2004

Once again, industry shipments from California have ascended into record territory. At 75.7 million pounds, February 2004 shipments shot by the all-time record of 66.7 million pounds for February set last year. As a result total shipments of 2003 crop are increasing over last season.  Last month total shipments were 1.5 million pounds ahead of last year, this month that lead has increased to 10.5 million pounds.  Total shipments now stand at 653.5 million pounds versus 642.0 million pounds one year ago. This performance confirms that consumption continues to go well for California almonds.

Crop receipts continued to ratchet up during February adding another 1 % to the amount reported last month.   Receipts to date now total 1.025 billion pounds. This is not far from the CASS estimate of 1.0 billion pounds made at the start of the season. Taking carry in into account, total supply for 2003 is now 1.146 billion pounds. If it is assumed that shipments will maintain their current pace, the industry may well ship more than 1 billion pounds this season.  As such, the increase in receipts is both desirable and necessary. 

With regard to specific shipping patterns, domestic shipments of 21.8 million pounds during February were nearly identical to last year. A slight decline in shelled almond shipments was offset by higher shipments of manufactured items, the latter a result of increased growth in that sector. The strong boost in export shipments from 45.2 million pounds last year to 53.9 million pounds this year can be attributed entirely to shelled almonds.  This result is driven mostly by demand for raw material in Mediterranean countries where this year processors were faced with extremely short crops in their own countries. Following the recent onslaught of heavy frost in Spain, it appears that the 2004 crop season will also see higher than usual demand in Mediterranean countries for shelled almonds from California.

The market, responding to the changing weather patterns has seen some oscillation in the prices reported last month. At first, based on good weather forecasts and indications that the bud set was strong, prices softened. Then as cool weather prevailed, rains appeared, and a full Pacific storm swept across the valley, prices firmed. Finally, at the end of the bloom with the sun shining and bees out in force, prices eased slightly.  Current and new crop prices have generally merged for the time being.  This could change depending on how many supply problems emerge during the transition between the 2003 and 2004 crops, and the ultimate size of the 2004 crop.

February 2004

Industry shipments for January, 2004 totaled 77.0 million pounds, down
slightly from last year's record of 81.0 million pounds. Again, as was the case in
November, although the shipment number is down, it is by far the second
largest in history. Total shipments for this crop year are just slightly ahead of
last season, 577.8 million pounds compared to 576.3 million pounds.

Crop receipts jumped to 1.015 billion pounds just slightly exceeding the CASS
estimate of 1 billion pounds. The industry reported an additional 29 million
pounds of receipts in January. The additional tonnage is good news in an
industry that has been less than enthusiastic about forward sales.

Domestic shipments fell slightly to 21.6 million pounds compared with last
year's total of 23.5 million pounds. However, shipments to date of 158.3
million pounds still slightly exceed the 156.9 million pounds recorded last season.
Of interest, domestic shipments of brown almonds are down about 10 million
pounds while manufactured shipments are up about 14 million pounds. This is a
total reversal from last season when brown shipments increased 50 million
pounds for the year while manufactured shipments were down slightly. Export
shipments also decreased slightly to 55.5 million pounds vs. 57.6 million pounds.
Export shipments to date are now about exactly the same as last year at 419.5
million pounds. Other almond producing countries, Italy, Spain and Greece, are
up almost 21 million pounds. Russia and France also reported increased
shipments of about 6 million pounds. This means the rest of the export countries
are down a collective 27 million pounds. Of course, higher prices should have
the effect of lowering consumption.

Computed inventory is 558.9 million pounds compared to 535.2 million pounds
last season. However, commitments this year are reported at 237.6 million
pounds, approximately 40 million pounds more that last year. The net effect is
that the reported uncommitted inventory is 321.3 million pounds or 17 million
pounds less that last year at this time.

Market prices remain very firm and in fact may have risen slightly during the
month. Sellers are very content with their sold positions and are not
willing to chase any business that is not in their price range. There are constant
inquiries from buyers for coverage through August. It is believed within the
industry that it is getting difficult for buyers to find the type of almond
they need or to find handlers who want to cover long term

Right now all eyes are on the 2004 almond crop that will begin its annual
birthing process within days. The bud set looks excellent. The chilling hours
have been plentiful. Water should be sufficient. Now all we need is some good
weather and hungry bees.

January 2004

Following a slight dip as reported in November, industry shipments bounced back into record territory in December. Total shipments for the 2003-2004 crop year have now reached 500.8 million pounds, compared to 495.3 million pounds for the same period last year. With seven months remaining in this crop year, the industry is on track to reach, and perhaps even exceed, the Almond Board of California shipment forecast of 950 million pounds.

Together with the news of increased shipments came news that receipts had climbed to 985.9 million pounds. This was slightly more than anticipated by the market but less than the 1,043.8 million pounds received through December of the prior year. Taking into account the August 1, 2003 carryin, the total supply for the 2003-2004 crop year now stands at 1,109 million pounds. This exceeds last year at this time by 2.4%. Considering the ever persistent growth in annual almond consumption and the shortfall this year in Mediterranean crops, any such supply increase is good news.

Last year for the period January through July, additional crop receipts amounted to 40 million pounds. Applying this amount to year to date 2003-2004 crop receipts means that the industry should reach or slightly exceed the Almond Board of California estimate of 1 billion pounds for the year. Again, this is good news for the reasons mentioned in the preceding paragraph.

At 27.2 million pounds, domestic shipments during December were particular strong, up nearly 4 million pounds over last December. This surge was led by increased demand for manufactured products. At 66.4 million pounds, export shipments were up only slightly over the same period last year. Higher shelled and manufactured shipments were offset by lower inshell shipments. This is the result of market timing issues and not a structural change in export markets.

Computed inventory at the end of December is 607.8 million pounds, which is a little more than last year. This is counterbalanced by higher commitments of 248.5 million pounds. The net result is that uncommitted inventory is a little less than last year at this time.

After a relatively slow period associated with the year-end holiday lull, buying interest began to pick up this month. Part of the reason for this is the significant decline of the U.S. Dollar against other major currencies, particularly the Euro. This is giving overseas buyers, many of who were slow to commit, an opportunity to buy without feeling the full effect of higher almond prices from California. In addition, some buyers are coming forward to buy quantities now as a hedge against a possible poor bloom in February.

December 2003

The Almond industry shipped 96.8 million pounds during November.  Although under last season's record 112.1 million pounds of shipments, it is still, by far, the second biggest November in history.  Please remember that last year the industry was playing catch-up in November after the dock strike.  This brings total shipments this crop year to 407.2 million pounds, compared to 406.0 million pounds last season.

Crop receipts are reported at 914.2 million pounds compared to 952.4 million pounds through November last season.  Last year they received another 130 million pounds after November.  Most people agree that the 2003 crop does not have that much left to deliver.  It is felt that final crop numbers could range from 950 to 985 million pounds. 

Domestic shipments fell off to 25.6 million pounds from the record 31.1 million pounds shipped in November 2002.  This brought domestic shipments to date to 109.5 million pounds, just slightly less than last season.  Of interest, inshell shipments are off by 36%, manufactured shipments are up over 9 million pounds or 32%, and shelled shipments are down almost 9 million pounds.  These are some trends that will bear watching.  Export shipments were also down for the month (almost 10 million pounds).  However, shipments to date are still slightly ahead of last season, 297.7 vs. 295.9 million pounds.  Heavy shipments into Spain, Italy and the Eastern Bloc have compensated for lower or static shipments to most of the rest of the world.

Computed inventory is 632.5 million pounds compared to 589.2 million pounds last year.  At the same time, commitments are up over 30 million pounds at 284.6 million pounds vs. last season at 251.6 million pounds. This leaves the uncommitted inventory at 347.9 million pounds or only 10 million pounds more than last season.

Sellers seem content to hold unsold tonnage while buyers who are covered through December will not show their colors until they actually need shipments.  Buyers in Europe who are short continue to think that prices will soften while sellers are content with sales and reluctant to sell.