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Kernel, inshell prices fall as market awaits direction from harvest

September 22, 2021

Prices in the global almond market mostly slipped the week ended Tuesday partly due to softer demand in a market still seeking direction from the 2021 harvest.

“I think there is a lot of head scratching,” said a Kern County packer on Tuesday. “I think everybody is still trying to figure out what this is and what this isn’t.”

Some packers say concerns about sizing and yields are easing, while others note that those concerns remain valid – particularly reports about smaller sizing in the southern half of the state. Crop from that region totaled 54.6% of the total harvest in the 2020-2021 crop year, according to the Almond Board of California.

The Kern County packer said with roughly 60% of its Nonpareil harvest sized, its Nonpareil crop is averaging 27/30 compared with 25/27 last year. A second packer in Kern County, which is the southernmost part of the San Joaquin Valley, confirmed the lower sizing, saying Nonpareil from its 2021 crop is also averaging 27/30 compared with 25/27 last year.

The lower sizing means sellers are waiting for more harvest results before making new commitments, to ensure existing commitments are met, the second packer said. Growers have only recently begun harvesting their pollenizer varieties.

Market sources said growers are also balancing discipline with the need for cash. A third packer in southern San Joaquin Valley said growers in its call pool are seeing lower yields and are holding back offers until October.

“Yesterday, I had quite a few calls from India, all asking for (NPIS), but I had to turn them away because of zero grower support,” the third packer said.

But the third packer noted some growers will need to come into the market soon to meet financial commitments, a move that could be accelerated by ongoing seaborne freight issues, which are delaying shipments and slowing payments to growers as a result. 

In the NPIS market this week, verified FAS trades were reported as low as $2.17/lb for prompt shipment to a high of $2.25/lb for November shipment. On a CIF India basis, verified trades were reported as low as $2.25/lb for October and November and as high as $2.28/lb, also for October and November shipment.

Market opinion was divided on the item’s direction, with the third packer citing renewed demand from India as proof buyers are “trying to capitalize before it goes up … due to a lack of availability,” while a U.K.-based trader said NPIS pricing has “found a level it’s happy to sit at.”

A California-based packer said the current market for  NPIS is “all traders buying today, it’s not actual customers … we’re selling to traders making positions,” adding that he thinks those traders are “loading up for a short-term play.”

The wild card is China, which has been “inquiring every day,” but has yet to “really step in and put their stake in the ground,” said a fourth packer.

The assessed price for IIS lost 6 cents on the week. Buying from China could push inshell pricing higher, but on a kernel-weight basis, NPIS is still trading at a premium to NPX 27/30 and smaller kernels, implying that sellers have room to profit on inshell trade at current price levels. Stratamarkets assessed NPIS on Tuesday at $2.19/lb FAS, which equals a kernel-weight price of $3.13/lb FAS.

Kernel prices were mixed during the week, with most Nonpareil items down. In the STDS market this week, the spread between STDS pricing for 2020 crop and 2021 crop moved closer to parity, as the premium for 2021 crop slid based on trades reported in the market.

STDS prices for 2021 crop traded at a premium of as much as 15 cents in previous weeks, but slimmed Tuesday when verified trades were reported at $2.38/lb FAS and $2.39/lb FAS for 2020 crop and $2.40/lb FAS for 2021 crop, all for prompt shipment.

“Because of the size of the carryout, the 2020 crop was discounted,” said the U.K.-based trader. “And clearly, the 2021 crop is coming down to fall in line with the 2020 crop, and my take on that is the 2020 crop reflected true supply and demand fundamentals, whereas the 2021 crop had a lot of sentiment built into it, because it was not physically there, it was still on the trees.”