Almond Market Report – December 2014

We hear the annual Almond board conference was well attended in Sacremento last week. The conference was held over two days over which the November shipment report was released. The report showed a significant decrease in shipments (28%,) both exports as well as domestic demand was down.

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Many buyers felt/hoped this might encourage the growers and packers to start being more aggressive in the market which would ultimately lead to a softer market. However a week on from the figure and the growers appear unabated.

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The market appears to be exactly where we were one week ago and with little appetite from the second hand to sell the market short, the market appears stagnant.

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So why do the growers not want to sell today? Well ultimately it’s all about the lack of water and crop size. There is belief that the final crop will not exceed 1.85b lbs, much less than the projected 2.1b projected at the end of June. Receipts to date are a touch over 1.7b lbs and as it was an early crop this year it’s is believed that not much more will “trickle in,” over the next few weeks. We should know the final crop receipt by the time the December figure is released at the start of Jan. Until then we have little choice but to follow California’s lead.

There has been positive news recently with regard to California’s drought. There has been a good number of showers over the past few days and more are showers are forecast in the coming days. However we hear that much more rain is needed to end the drought but crucially California needs more snow in the Sierra Nevada mountain range. We will continue to monitor the weather forecast and keep you updated.

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On the other hand we cannot ignore what these prices have done and will do to demand. Over the last couple of months Europe has been quoting supermarkets for the first quarter of next year. Everything that has been delivered this side of Christmas has been at significantly lower levels to the supermarkets. The question then is will the supermarkets accept a price increase when there is high competition between them? We will have to see…

India has bought a lot this year, in fact they have over bought. We hear Diwali sales were poor and India is overstocked and looking to re sell. China has been the sleeping giant for a long time now and their window to buy from the Chinese New Year is nearly closed. Unless there are a lot of Chinese traders on the next few flights into San Francisco, then China will not buy anywhere near the same volumes they have in the past.

The market is delicately poised. The growers have deep pockets and are prepared to wait but have they miss the demand, we have to see. Although I cannot see any collapse in this market I feel there might be a buying opportunity in the next couple of weeks to cover some loads before the bloom has a chance to bring up any nasty surprises.

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