Editor’s Note: This analysis appeared in the Darco Foods analysis of the May 2020 Almond Position Report. Click here to download the full report.
May 2020 shipments of 153.89 million pounds were about 25 million pounds less than the record set last year. This is only the third time this season where shipments have not been a new record and/or exceeded the previous year’s monthly shipments.
Year-to-date shipments are currently 2.017 billion pounds, up 3.72% compared to last season. New sales for the month of May were about 111 million pounds compared to 108 million pounds last year.
Total committed shipments are up 25.76%, with both domestic and export commitments up 36.76% and 14.77% respectively.
Uncommitted inventory is up 20.72% or about 57 million pounds more than last season at this time.
Should shipments from California for the remaining two months of the crop year match those of last season, the carryout will be around 465 million pounds. California is currently 88% sold (shipments plus commitments) compared to 89% sold at this time last year.
New-Crop Buying Noticeably Increases
Immediately after the release of the April shipment report and the 2020 Subjective Estimate a month ago, prices in California decreased by about $0.15/lb. Prices have since stabilized over the last couple weeks.
Prices are at some of the lowest levels seen in the past decade. New crop buying activity has noticeably increased in recent weeks with several key markets looking to cover a portion of their new crop requirements at these attractive price levels.
The May shipment report marks the first month where new crop commitments are reported. New crop commitments are currently 286.5 million pounds, up 115% or about 153 million pounds more than last year at this time. Clearly, buyers are taking advantage of these historically low prices, which is an encouraging sign given a very large record crop on the horizon.
As countries all around the world continue to slowly open up, we expect demand to continue to increase, especially at these attractive levels. Even with a larger carryout expected compared to recent seasons, several items are in short supply.
Objective Estimate Just Ahead
Most of the remaining inventory in California appears to be made up of Cal/Carmel Type/NP SSR and Supreme. Inventory of NPX is very limited, especially good quality NPX in the most preferred sizes of 18/20-30/32.
As mentioned earlier, prices have held stable in recent weeks, especially on new crop. Given the increase in demand, as well as the reluctance from growers to lower prices further, now may be a good time for buyers to cover a portion of their new crop needs.
Buyers and sellers alike have commented that current prices are more than fair and primed to increase consumption at these levels.
It’s all about confidence now. With some continued stability, increased demand should soon follow.
Next month on July 7, the Objective Estimate will be released. To date, crop estimates from Wonderful Almonds, TNT and the Subjective Estimate have ranged from 2.85 – 3.00 billion pounds. Given the inaccuracy of the Objective Estimate the last two seasons, we don’t expect a drastic change from current expectations. As always, our teams in China, Dubai, India and California are at your service.