Sanjoy, Michael and Ishan have spent the past week touring the Almond growing regions in California, and returned with the following thoughts on the current market situation.
 Supply
With a movement from seasonal to spot/pool call, growers are dictating when they want to sell to the handlers/packers. Handlers are competing with each other for the growers crop.  Therefore any negative or pessimistic news they might bring to a grower could potentially result in a lost sale.
Growers only hear that demand is exceptional. Growers appear unabated even with the anticipation of a 2B+ lb 2014 crop. Water remains a difficult topic and there is real fear that the 2015 crop will be small. The water is very much a political issue. The growers are fighting with environmentalist over the water. The environmentalists would rather see the water channelled into the bay area for the fish.
Some growers have drilled wells but we hear there is now a two year waiting list to get one drilled. We heard before we left for California that the quality of the well water was poor with high salinity. Certainly on the Westside we saw some orchards where the Fritz variety had very brown leaves. Other areas looked much better.
Of course all of this changes if 2014 Objective figure is significantly larger than 2.05B lbs, shipment numbers fall off and the heavens open.
Demand
The May 2014 Shipment number showed we are currently running at 4.69% above last years shipments for the same period.
Domestic (USA,) sales have been strong. Walking around a Supermarket in Fresno we noticed almonds in the ingredients of many cereals. Almond butter sales appear very strong in the USA. We heard some schools have banned peanut butter because of allergies and consequently almond butter sales have increased.
Western European sales have also been strong. Although the increased shipments to Spain could be the result of a poor 2013 Spanish crop. So far it appears the Spanish 2014 crop looks good.
Demand appears damaged in China, India and Russia where the markets are more reactive to price movements.
Chinese New Year starts on the 19th Feb 2015 so buying can wait until late Oct/November 2014.
Diwali starts October 23, currently there is limited buying for July and August months.
The fundamental aspect of the current almond market is that the growers are holding the cards. We now wait in anticipation for the objective estimate to be announced which will give some guidance as to where this market is going. On our travels we heard estimates from various handlers ranging from 2.00-2.15B lbs, so it certainly seems that there are no issues with the 2014 crop. However the water issues continue to be discussed and although we are in an El Nino year, if there is little rain this winter we could see a very firm market going into 2015. On the other hand if we do have rain and shipment numbers fall off then we should expect a weakening market. The market is delicately poised waiting for a push one direction or another. Prices are extremely high but the fear of water or rather lack of water remains a huge concern.
In summary
The Almond Board of California is due to make its objective estimate of the new crop today at approximately 8pm (BST, 9pm CET). A figure less than 1.95 billion will be seen as bullish – prices will rise.
Between 1.95 and 2.05 billion we see as neutral. 2.05 and upwards we see as bearish, and at 2.10 we see a paradigm shift with a possible crash possible. The growers will be looking at the shipment figures, their thinking being that these are the hardest numbers in the book. Whilst shipment figures show increases on a year on year basis, the grower will remain in charge, unless we see a massive figure.