Pecans Face Weak Exports and Firm Supply as New Season Approaches

U.S. pecans are heading into the close of the 2025/26 marketing year with supply holding firm and demand clearly underperforming, especially on exports. July data confirm a sharp 44% year-on-year drop in overseas shipments, leaving inventories elevated versus last year and setting up potential supply pressure if international demand does not recover into 2026/27. July’s market balance is defined by a rare combination: receipts comfortably above the five-year average, while both monthly and season-to-date shipments sit well below historical norms. Europe remains the key outlet for U.S. pecans, but volumes there and across the Middle East and Asia have softened. Against this backdrop, Mexican pecan kernel offers in Mexico City are broadly stable in EUR terms, suggesting buyers remain cautious but not panicked as they wait for clearer signals on export demand and the incoming U.S. crop.

Prices

Spot export statistics point to a demand-driven, mildly bearish fundamental setup, yet near-term price moves are muted rather than sharply lower. Stable Mexican FOB offers for organic broken kernels around EUR 21.5/kg and non-organic halves near EUR 26.8/kg over the last month indicate a sideways tone, with little evidence of aggressive discounting despite weak U.S. exports and soft global trade sentiment.

Given the rise in U.S. net position and above-average receipts, the main price risk into early 2026/27 is to the downside if buyers continue to delay coverage and if Europe and Asia do not step up purchases. However, firmer domestic U.S. demand guidance in recent industry analysis and expectations for tighter high-quality supply in some growing areas could help to floor prices for top grades and origins in the medium term.

Supply & Demand

On the supply side, U.S. handler receipts reached 317.6 million lb season-to-date by July, up 6.4% year on year and 4.5% above the five-year average. July receipts alone, at 5.0 million lb, were 13.9% higher than a year earlier and 21.8% above the five-year July norm, underlining that raw material availability is not currently a constraint.

Demand, by contrast, is clearly lagging. Total July shipments fell to 21.5 million lb, down 14.2% year on year and 14.0% below the five-year average, with season-to-date movement at 316.3 million lb, 10.3% lower than last year and 17.0% under the five-year average. Notably, cumulative shipments are now 9.1% below the five-year minimum, illustrating how subdued this marketing season has been overall.

Exports are the weakest link. July overseas shipments collapsed to 3.0 million lb, a 44.4% year-on-year drop and almost 45% below the five-year July average. Europe still absorbs nearly half of U.S. pecan exports (49.7%), followed by North America (20.0%), the Middle East (17.1%) and Asia (13.1%), but volumes to these regions remain well below recent norms, leaving more product to be carried and placing greater weight on domestic U.S. utilization.

Fundamentals & Inventory

Inventory dynamics confirm a market that is comfortable on supply but not oversupplied to crisis levels. July stocks stood at 199.7 million lb, 5.1% higher than a year earlier but just 1.0% below the five-year July average of 201.7 million lb. The small deviation from historical norms shows that higher receipts have so far mainly offset weaker shipments, rather than creating a large surplus.

The structure of commitments and net position is more concerning for sellers. July commitments fell 14.7% year on year to 143.2 million lb, signaling slower forward sales. At the same time, the industry’s reported net position surged to +56.5 million lb, more than doubling from +22.1 million lb a year earlier. This 156% increase in net length, combined with the fall in cumulative shipments, implies greater reliance on late-season bookings or on carrying old-crop into 2026/27.

Weather and crop prospects add nuance. Texas growers are currently expecting a larger 2026 crop despite heat and dryness during kernel fill, while parts of the Southern Plains and Southwest face a mix of persistent heat and episodes of above-average precipitation into September. This combination could support volumes but raises questions about kernel quality and size in some orchards, reinforcing a likely widening of price spreads between standard and premium lots.

Weather Outlook for Key Growing Regions

Short-term weather outlooks for September 2026 point to above-normal temperatures across much of the central U.S., including key pecan states such as Texas and Oklahoma, with continued heat advisories in parts of the Southern Plains. At the same time, forecasts indicate episodes of enhanced monsoonal moisture and above-average rainfall probabilities in eastern New Mexico and parts of western Texas, which could alleviate stress in irrigated orchards but also complicate late-season disease management.

Looking into the 2026/27 cool season, a developing strong El Niño pattern is expected to increase the likelihood of a more active southern jet stream and wetter-than-normal conditions in portions of the southern U.S. from late autumn into spring. For pecan growers, that could support soil moisture recovery and tree health ahead of the 2027 crop, while also elevating the risk of storms and localized flooding during key management windows, factors that both growers and buyers will monitor for potential impacts on long-term supply stability.

Outlook & Trading Recommendations

With only one month remaining in the 2025/26 marketing year, market focus is shifting rapidly to final shipment data, export booking trends, and the actual volume of old-crop inventory that will roll into 2026/27. The current configuration of stronger receipts, inventories near historical norms, and structurally weak exports suggests that the U.S. pecan market is entering the new season with a modest supply overhang and a heightened need for renewed buying interest from Europe, the Middle East and Asia.

New-crop expectations in major producing states such as Texas appear broadly favorable in volume terms, but recent heat and dryness during kernel fill raise some quality uncertainty. Against this backdrop, prices for mainstream grades are likely to face continued downward or sideways pressure unless export demand shows a clear rebound. Premium, high-specification product could still command better differentials, particularly if weather-related quality issues materialize in parts of the belt.

Trading outlook (next 4–6 weeks)

• Buyers (roasters, traders, industry users): Consider gradual, scale-down coverage for 2026/27 on spot and nearby positions, focusing on high-quality lots while leverage from weak exports persists.
• Growers and handlers: Avoid over-committing early at discounts; prioritize sales into firm domestic and premium segments and monitor export inquiries from Europe and the Middle East for any sign of recovery.
• Speculative participants: Bias remains mildly bearish to sideways; downside appears more limited for top-quality product, while average grades remain vulnerable if season-end stocks and new-crop volumes surprise to the upside.

3-day directional price indication (EUR)

• U.S. export-oriented pecan kernels (CIF Europe, indicative): Stable to slightly softer; modest downside risk if additional old-crop offers emerge.
• Mexican pecan kernels (FOB Mexico, organic and conventional): Largely stable around EUR 21–27/kg; any moves likely limited to narrow adjustments in premiums for specific sizes and grades.
• Domestic U.S. industrial demand (delivered processors, EUR-equivalent): Steady, with potential for selective firmness on premium-quality halves if quality concerns intensify in hot, dry regions.