Almond Market Update: Harvest Nears as Supply Concerns Persist

Market Activity

• While India was very active early this month, it has been much quieter since the position report was released.
• Europe has been reluctant to pay higher prices so pollinators have seemed to flatline and even softened in some cases.
• MENA has woken up as the geopolitical situation improved and is arguably the strongest market where they are looking to buy up current and new crop Nonpareil and Independence.
• Asia has had to continue buying inshell from California due to Australia’s quality issues
• Domestic shipments remain flat to lower with similar near term coverage buying patterns to Europe.

We are also in the summer doldrums where the broader market is historically the quietest. While, this year has been more active than previous years because of the tighter supply and attractive pricing for growers, offers will still be scarce until we get into harvest.

Harvest Preview
This past week brought unseasonable cooler temps and scattered light precipitation to the Central Valley over the weekend. The cooler temps have helped reduce stress on trees and pushed harvest estimates back a few days. Last month, growers were predicting starting up to 2 weeks earlier than last year and think most are anticipating closer to a week earlier. The precipitation is not a risk to the crop yet but reminded growers they may want to hold off before selling too much in case the super El Nino brings early rain while nuts are on the floor.

Talking with growers, feelings on the size of the crop vary widely. Many are thinking it could be less than 2.7 billion pounds, making them reticent to sell. If that remains true, then this market will more than likely hold and even may firm due to the much smaller than normal carry out. If they start seeing more loads than they anticipated in the coming weeks, the market should begin to see some call pool buyers seeking liquidity.

Heads or Tails

Headwinds – While the crop size (2.7 Billion) will be the major focus for the coming months, continued USD strength (making 40 year highs against the JPY today) is the most notable, especially given weaker domestic demand trends. It will be hard to raise pricing much more when the currency is already doing it for a lot of foreign buyers.

Tailwinds – Buyer coverage broadly remains on the lighter side, so any unanticipated demand recovery could force them to push pricing higher while growers and handlers watch how harvest progresses.
The recent drop in oil prices should allow consumers to spend more on healthy snacking purchases.