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Almond Prices Continue Fall as Buyers Try to Cover Long-Term Positions

June 22, 2020

Prices fell in the California spot almond market during the week ending June 19 as packers sought to sell current crop inventory and buyers focused on covering positions further forward.

Prices for Standards for prompt shipment were pegged between $1.72 and $1.76/lb FAS Oakland, about 6 cents/lb lower compared with prices the previous week. Trades last week for Standards for prompt shipment were heard at $1.73 and $1.75/lb FAS Oakland.

The market for new crop Standards was pegged higher with bids at $1.80 and offers at $1.85/lb FAS Oakland.

Market participants said packers and growers last week showed an increasing eagerness to sell current crop supply with the new crop just weeks away.

“There is probably more pressure on old crop because there is a big push to get it out,” said one trader.

Prices for Standards continue descent

Last week marked the sixth consecutive week that prices for Standards for prompt shipment have either declined week-on-week or remained flat.

The chart below shows weekly prices from May 8 to June 19, 2020:

Almond prices tumbled the week ending May 15 after the U.S. Department of Agriculture (USDA) predicted a record 3-billion pounds of almond production in California this year.

During the next three weeks, prices for prompt shipment Standards remained largely flat, shedding only 4 cents/lb during that time period. They began falling again the week ending June 12 following the release of the May 2020 position report from the Almond Board of California (ABC), losing 12 cents/lb since then.

Last week, market participants continued to dissect the numbers from the ABC’s latest position report. One large almond marketing company noted in a monthly market update sent on June 15 that the position report showed the first drop in shipment volumes in six months.

The company’s market update also struck an optimistic note for sellers, stating that demand for new crop almonds is strong.

“California production from August into mid-November is likely to be heavily committed even with the large crop,” the report said. “Supply & shipments will be limited by production capacity more than by crop size.”

Buyers looking beyond current crop

Even though prices fell for prompt shipment Standards last week, buying interest for new crop almonds strengthened.

One almond buyer at a food distribution company in Mexico said last week that his industrial customers there are trying to cover most of their needs for later this year and next year. A broker in Europe said his buying clients there were also seeking to lock in prices last week for their long-term needs.

“There are a lot of opportunities for new crop,” the broker said. “People want to take positions with these prices.”

One packer agreed, saying he received a heavy flow of bids for new crop almonds last week, primarily from buyers abroad.

“I think they figure these are the lowest prices they can get,” the packer said.

However, he added that he plans to wait before selling his supply of new crop almonds and may sell more on on the spot market later this year and next year with the view that he’ll receive better prices there.

In other varieties, prices for Nonpareil, 23/25, Extra almonds weakened last week with offers heard at $2.15/lb FAS Oakland for prompt shipment. The item traded the week prior at $2.21/lb FAS Oakland for prompt shipment amid talk that it was in short supply.

Also last week, Nonpareil, 23/25, Extra almonds traded at $2.15/lb FAS Oakland for September and October shipment; and at $2.10/lb FAS Oakland for October shipment.

Nonpareil, 25/27, Extra almonds traded at $2.05 FAS Oakland for June shipment. Nonpareil, 23/25, Supreme almonds traded at $2.10/lb FAS Oakland for June shipment.

Nonpareil Inshell almond prices were pegged last week at between $1.43 and $1.45/lb FAS Oakland for prompt shipment, up slightly from price levels the previous week.

The market for Nonpareil Inshell almonds has been turbulent in recent weeks due to contract defaults occurring in India. Even though market participants last week said the Nonpareil Inshell market was returning to normal, participants said new defaults were heard to be originating from companies in Europe and Africa.

The USDA is scheduled to release its 2020 Almond Objective Measurement report on July 7.

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