Market Update: Almond Industry Sees Historic Shipment Levels Amid Weather Fluctuations

Normal Temperatures Expected Before Another Heatwave

Following last week’s heat wave, temperatures have returned to seasonal norms with highs in the upper 80s to low 90s. However, the extended forecast predicts another heatwave this week, with temperatures expected to soar to between 100 and 108 degrees.

Record-Breaking May Shipments

The May shipment report, released on June 11th, revealed that May 2024 was the second-largest shipping month for any May period in history. With 226 million pounds of almonds shipped, this marks a 15.5% increase compared to last year. Overall, the industry is now 5.25% ahead of last year’s shipment figures, having shipped over 2.3 billion pounds of almonds through the current crop year. With just two months left in the season, this year is poised to be the second-largest for overall shipments, following only the 2020/21 crop year, which saw a 3.1 billion pound crop.

Tight Supply and High Demand

The significant shipments have pressured current stocks, making popular varieties and grades increasingly difficult to find. Buyers are encouraged to place any last-minute orders before the new crop arrives, as the industry is doing its best to fulfill these needs.

Crop Estimates and Industry Reports

With crop receipts nearly complete, the final crop size is expected to be around 2.44 billion pounds. Meanwhile, the subjective estimate predicts a rebound in the crop to 3.0 billion pounds, a level of production not seen in three years. This will be a hot topic leading up to the Objective Estimate on July 10th. The industry is anticipating a busy week between the two major reports, hoping for a smooth outcome.

Upcoming Industry Milestones

• Objective Estimate: July 10, 2024
• Position Report: July 11, 2024

Bullish Trends

The market has responded to the tight supply with rising prices, pulling up new crop pricing as well. New crop sales have already reached 173 million pounds, over three times last year’s figures for the same period. Additionally, new sales for the current crop were 134 million pounds, an 18% increase from last year’s 114 million pounds, contributing to a very tight transition with a carry-out of less than 450 million pounds. Even with a larger crop on the horizon, supply and demand are expected to be more balanced in the future.

Bearish Trends

If the Objective Estimate surpasses the projected 3 billion pounds, it could disrupt this fragile balance. This is particularly critical as global shipping costs have tripled in recent months due to containers being pulled back to China. With dwindling supply, there may be little to ship in August or September as processors wait to harvest and ship the new crop, potentially leading to a slow start to the new crop year. The Objective Estimate could be a game-changer, and the industry is awaiting the next couple of weeks before making further decisions.

As the almond industry navigates through record-breaking shipment levels and prepares for potential changes in crop estimates, stakeholders must remain vigilant. The interplay between weather conditions, market trends, and global shipping costs will continue to shape the industry’s landscape in the coming months.

Source:Ofi