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Almonds Update:

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.