April Position Report Highlights
The “April Position Report,” released on Tuesday, May 14th, marked the second strongest shipping month of the 2023/2024 crop year for almonds. With just three months remaining until the new crop, expectations are for continued strong shipments, which will put pressure on the remaining supply. Despite the tightening supply of several varieties and sizes, buyers remain flexible and understanding of the overall supply situation.
Weather and Crop Conditions
May has seen mixed weather conditions, including a strong rainstorm and cooler temperatures, which have provided ample water for irrigation. The average temperature for this time of year has been about 13 degrees cooler than usual. However, temperatures have recently risen into the high 80s and 90s. The almond orchards along I-5 in Bakersfield look lush and are heavy with almonds.
USDA/NASS Production Estimate
The USDA/NASS has released a subjective estimate of 3.00 billion pounds for the new crop, a 21% increase from last year’s production of 2.45 to 2.47 billion pounds. The industry will now focus on marketing the new crop based on this estimate, pending the objective estimate due in less than six weeks.
Current Crop and Shipments
April shipments totaled 241.48 million pounds, up 22.4% from last year, continuing to exceed expectations and reducing this year’s carry-out to an estimated 450 million pounds. Crop receipts have reached 2.44 billion pounds and are expected to increase slightly in the coming months. Year-to-date shipments stand at 2.08 billion pounds, up 4.24% from last year.
Domestic and Export Market Performance
Domestic shipments in April reached 64.81 million pounds, a 14.1% increase from last year’s 56.82 million pounds, marking the strongest shipment month for the domestic market this season. Export shipments were also robust, totaling 176.7 million pounds, up 25.8% from last year’s 140.44 million pounds. The export market remains the driving force, with a 5.6% increase in shipments over last year, while the domestic market is up only 0.60%.
Inventory and Quality
The remaining inventory is expected to create a tight transition, with limited usable material left. Most of the remaining stock consists of lower grades such as Standards and Natural Whole & Broken.
Market Trends
Bullish Trends:
- Strong shipments and nearing the end of crop receipts.
- Quality grades have increased slightly, with offers becoming scarce.
- A lower than expected carry-out of below 450 million pounds will make the transition from the current crop to the new crop challenging from August through October.
- Despite price increases, almonds remain a great value compared to other tree nuts, maintaining high demand across all food sectors.
Bearish Trends:
- A forecasted production of 3 billion pounds, with a carry-out of around 550 million pounds, will keep the market balanced.
- New crop offers are already below the current market, with many waiting for the objective estimate in July before booking new crop.
- The current bearing acreage exceeds that of the 2018 crop, which yielded 3.1 billion pounds.
- With limited supply, shipments may drop significantly in June and July.
Comment
The almond market is navigating a complex landscape of strong current shipments, anticipated high new crop yields, and tight supply. Stakeholders should closely monitor the upcoming objective estimate and market trends to make informed decisions. The resilience and flexibility of the market, coupled with strategic planning, will be key to managing the transition between crop years effectively.
Source:Ofi