In our market report of last week, we announced the objective crop estimate which was based on 2290 lbs per acre. Historically seen this is quite high as you can see in the figure.
The Almond Board of California released the June position report yesterday. The shipments in June were at 156.764.899 pounds, an approx.. 11,5% decrease in comparison with previous year. The total shipments are still up by approx. 8 % in comparison with 2017. Also commitments are down. This can be explained by the good crop expectations and buyers to wait as long as possible to cover. Also for the almonds the uncertainty on the tariffs is having impact and as someone write, hanging as a dark cloud above the almond market. Will the increased tariffs have an impact on Chinese demand and if so, will prices come down further. The current discounts on prices are stimulating business with 2nd hand market even offering lower than origin. Offers are available on request.
The market for Almonds showed her strength last weeks, being a firm market with increasing prices. This trend of increasing prices is expected to continue even further coming weeks. Both buyers and suppliers are pushing the market upwards. Suppliers start to trade based on bids instead of selling prices, putting themselves in the position to make the call. Also the increasing demand, ‘caused’ by the buyers who in the first way where after the low prices, is affecting the market. In the last market report we spoke about the expected shortage on the premium grades, these effects are already influencing the market as well, widen the gap between high and low grades. Our strong advice is to cover at least for the short term, since prices are expected to increase during the coming weeks.
While the pressure was expected to be reduced on the export market, the latest shipping report noted another increase of at least 39% on exports compared to November last year. The high figures are caused by an increase of the global demand, no specific region seems to be responsible for this increase. China is most close to be called a gamechanger, but even with their import figures of roughly 27.000 MT Shelled/inshell product, they did not even absorb 5% of the total shipped product. With decreasing prices during the end of November, the market remained more or less stable during December. Despite the high shipment figures are prices not likely to increase on the short term. Based on speculations in the market, our advice is to follow the market closely and be reluctant on the nearby bookings.
The California Almond board released the final shipment figures of 2016 this week. The export figures of December were at a plus 16% level compared to 2015, resulting in a total export figure of 278.530 MT in 2016. The market remained on a stable course during the first week of 2017 and is expected to continue this route on the short term. However, the availability of smaller varieties seems to become less, resulting in a reduced-price gap between the different sizes in the market.
After the high shipment figures of the past months, the European market seems to be temporally saturated. We have seen prices from origin decreasing from the start of 2017 on, lower qualities such as STD 5% seem to be less affected. Since the current market is not driven by extreme factors, people fall back on other more undefined indications, such as the positive weather conditions in California for the next season. It stays to be seen whether the decreasing trends continues during the coming weeks. Our advice is to follow the market closely and don’t feel rushed covering the nearby positions on the other hand if you have a need and it fits you have to remember that almonds are at the moment the best buy in the basket of Treenuts.
Almonds continued to be the “best buy” of the treenut market the past two weeks. Rumours of several warehouses in Europe stuffed with California almonds are spreading its way through the market, keeping buyers away from rushed purchases at the current price levels. If we combine this situation with the weather reports from California, which show positive circumstances for the trees so far, the almond market is not likely to increase the coming weeks. Although the urge doesn’t seem to be there for quick action, we advise to consider covering short positions as a further decrease is not expected from this point either.
While the almond market has been in a downwards spiral since the start of 2017, we’ve witnessed a first breach from this trend last week. The heavy rainfalls in California made many sellers at origin to withdraw from the market. This event is reflected by increased selling prices, both at source as deeper into the distribution channel. As for today, speculations make their way throughout the market regarding the actual damage at the Californian orchards. While some say that supply for 2017 took a hit, others are doubting the actual damage and the event of exaggerated updates which are driving the almond market upwards.