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Market Reports

USA Almond Update 10/05/2019

Almond Update May 10, 2019

The Almond Board released the April position report today with shipments totalling 177 million pounds versus 176 million pounds from last year.  This falls right in line with expectations. Sales during April were strong again totalling 145 million pounds which is up from last year’s 108 million pounds.  One thing to note is since January 2019 the industry has sold 623 million pounds compared to 2018 January to April 506 million pounds.  The increased sales for the first part of 2019 will help ease the burden when working through buying for next few months.

We have been keeping a close eye on a few important markets this year and compared to last month they look mainly unchanged.  China/HK kept pace with being down 33%, which if the trade deal is resolved and the USA and CHINA open opportunities for agriculture products to move more freely into China one has to wonder how big of an impact that would have on the upcoming 2019 crop.  India is up 8% YTD but their local markets have not been able to move about origin prices for quite some time now.  The increase in shipments could also be attributed the early Diwali and need to cover most of the almond demand from current crop. Western Europe made some progress going from down 7% last month to only being down 5% this month YTD.  Some of this material could be unsold goods being positioned to capture the early holiday demand.  The Middle East maintained their position of up 8% and with most of the region being on holiday.

The past several weeks the market has been trading on a two-tier basis with current crop holding a strong position over new crop. Now as we sit in the beginning days of May it looks as if the industry is poised to ride the two-tier market well into the summer months.  The spread between current crop pollinators and new crop pollinators is a strong 20-25 cents per pound while Nonpareil holds a premium for current crop over new crop of roughly 15 cents per pound.  Whether these spreads maintain or grow will depend largely on what really needs to be covered between now and new crop and how much packers want to clean out before receiving the upcoming 2019 crop.  In general, there seems to be very little chance if any that current crop prices weaken, and we might expect prices to be stable to firm until the end of 2018 campaign.

The last several months have been building up to this moment and now it has become very apparent that this year’s transition into 2019 crop is most likely going to be even tighter.  The current uncommitted inventory is down 14.64% at 380 mm pounds versus last year’s 445 mm pounds. With commitments up 15.86% it could take the edge off the need for some buyers to cover but there will be a need to take some coverage between now and new crop for most major markets.  The question now is do buyer’s take the plunge now or do they roll the dice on whether they will be paying more later versus what they might pay today.

The industry is sitting at 86% shipped and committed with roughly 5 more months of shipments before any Cals or Carmels are available to ship.  The remaining inventory is mostly Nonpareil with limited but some availability on large size pollinators and independence.   This is evident in what the market was indicating leading up to today’s position report.  Unpasteurized prices ranged between $2.90-$2.95 on Carmel Type Supreme, Nonpareil $2.92-$3.10, Cal SSR $2.80-$2.88, BV Std 5% $2.73-$2.76, and NPIS $2.30-$2.35.  Even though demand slowed down for new crop the past couple of weeks prices levels remained static; BV Std 5% $2.43-$2.48, Cals $2.55-$2.65, Carmel Type Supreme $2.70-$2.75, Nonpareil $2.80-$2.90, and NPIS $2.08-$2.13.

Holding product into the 2019 crop won’t be something many sellers will want to do so managing sales between now and new crop will be priority.  Buyers will have to decide whether they want to take the action now and fill their gaps, buy hand to mouth as they have been most of the year, or buy spot goods as available.  As we mentioned previously, we feel market prices have very little resistance moving forward and will most likely stay near today’s levels.