Almond Market Steadies as California Faces Slight 2026 Crop Decline

California’s almond market is entering the 2026 crop year with only a marginal supply decline and generally steady prices, pointing to a broadly balanced but slightly firmer global market tone. The latest forecast shows California’s 2026 almond crop easing just 1% below last year as bearing acreage contracts slightly while yields hold flat. On the price side, recent quotes for US Nonpareil and Carmel and for Spanish Marcona and Valencia grades in mid-May indicate a sideways market, with only minor softening earlier in the month now stabilizing. Weather in California’s Central Valley has turned seasonally warm and dry after recent wind events, maintaining some production risk but no immediate shock. Overall, fundamentals argue for a mildly supportive bias rather than a sharp price move in either direction.

Prices & Differentials

Almond kernel prices in mid-May remain broadly stable in EUR terms across origins and grades, with only small week-on-week moves.

Over the past three weeks, both US and Spanish offers show only marginal adjustments of around EUR 0.05–0.10/kg up or down, suggesting that the first USDA 2026 crop signals have been largely priced in. Premiums for organic Nonpareil and Spanish Marcona remain significant over mainstream Valencia-type kernels, reflecting strong demand for specialty and snack applications.

Supply & Demand Balance

The key driver on the supply side is California’s 2026 almond forecast. USDA projects the crop at 2.7 billion pounds (shelled basis), down slightly from 2.715 billion pounds in 2025, a decline of about 1%. Bearing acreage is expected to slip to 1.39 million acres from 1.40 million acres, while yield holds steady at 1,940 pounds per acre.

This points to a modest tightening rather than a structural shift. Independent industry estimates cluster close to the USDA figure, reinforcing a consensus of a mid-2.6 to 2.7 billion‑pound crop and signalling that large surprise revisions are unlikely without major weather events. With projected carryout broadly in line with the current season, total available supply for 2026/27 should remain comparable to 2025/26 levels.

On the demand side, recent industry shipment data show that exports continue to anchor the market, with year‑to‑date export volumes modestly above last season even as some regions such as China and Northeast Asia lag. European, Southeast Asian and Mediterranean buyers remain active, while India continues to secure coverage, particularly for Nonpareil. Domestic US offtake is softer, preventing a more pronounced rally despite the slightly tighter supply outlook.

Fundamentals & Competing Tree Crops

The broader California tree crop complex underscores a gentle shift in acreage and investment. While almonds show only a small decline in bearing area, peaches are facing a sharper contraction, with 2026 production forecast down nearly 10% to 480,000 tons, led by a significant reduction in cling peach output from 212,000 to 170,000 tons. Pistachios and walnuts, by contrast, posted sizable 2025 harvests of 1.58 billion pounds and 809,000 tons, respectively.

This configuration reinforces almonds’ role as a cornerstone crop in California’s tree nut portfolio. However, competition from pistachios and walnuts for processing, snack and export demand is intensifying, particularly in price‑sensitive markets. For almonds, relatively flat yields over several years and incremental acreage removals suggest that the era of rapid structural supply growth has paused, making price more sensitive to weather shocks and demand swings than in the oversupplied years earlier in the decade.

Weather Outlook & Risks

In California’s Central Valley, the 10‑day outlook points to warm, dry conditions typical for late May, following a recent red flag warning episode with low humidity and strong winds. While such weather supports orchard access and disease control, it can increase moisture stress in blocks with constrained irrigation or marginal water rights.

Looking through summer, several forecasters highlight a strengthening El Niño pattern, raising the risk of episodes of excessive heat and humidity that could affect kernel fill and sizing for the 2026 crop. At this stage, conditions do not justify a weather‑driven bull market, but they argue against complacency: any sustained heatwave during nut fill would likely tighten the balance sheet and support prices, especially for premium Nonpareil grades.

Trading Outlook & Strategy

• For industrial buyers (roasters, confectionery, dairy alternatives): With a largely steady forward supply picture and flat prices, this is a window to extend coverage modestly into Q4 2026, especially for US Carmel and Spanish Valencia types where EUR prices are stable and still historically competitive.
• For buyers of premium and organic grades: Maintain a more proactive hedging stance on Nonpareil and Marcona, where strong export demand and potential weather‑related quality issues could widen premiums further if the summer turns hotter than normal.
• For growers and sellers: The current market rewards selective forward selling rather than aggressive pre‑harvest commitments. Consider layering sales on rallies triggered by weather headlines, while keeping some volume open in case demand from India and Europe surprises to the upside.

Short-Term Price Direction (Next 3 Days)

• US export grades (Carmel, Nonpareil, FAS/FOB US): Sideways to slightly firmer; tightness in premium Nonpareil could add up to EUR 0.05/kg if additional export demand emerges.
• Spanish kernels (Valencia, Guara, Marcona, FOB ES): Mostly sideways; stable local fundamentals and competition with US origin suggest only minor intraday moves within current ranges.
• Overall market tone: Balanced, with a mild upward bias driven by slightly lower 2026 California crop expectations and ongoing export support, but capped by comfortable inventories and subdued US domestic demand.