July shipment slowdown reduces likelihood of sub-130,000 ton US carry-out

August 18, 2022

Walnut shipments from California in July slumped 15% month year-on-year as Port of Oakland shutdowns and lower domestic demand took their toll during the penultimate month of the 2021-2022 crop year.

Shipments fell to 29,969 inshell equivalent (ISEt) short tons in July from 35,770 short tons the year-ago month, according to the California Walnut Board’s latest shipment report released on August 11.

The decline means the carry-out is unlikely to fall below 130,000 st, a figure that many packers had previously regarded as achievable last month, given that shipments from April to June averaged 57,534 ISEt per month, 17% higher than the corresponding 2021 period.

Before the strong run of shipments, earlier estimations had signalled the carry-out could end at 150,000 st.

New monthly sales dropped to 19,419 ISEt, down 25% from June but 57% higher than a year earlier. Packers have been keen to offload their last stocks of current crop at lower levels in order to free up warehouse space for the harvest that started this month.

Domestic U.S. kernel shipments in July dipped 10% month year-on-year to 15.2 million lbs, and crop year-to-date shipments fell to 176.6 million lbs, also down 10% on the year.

July inshell shipments increased 93% month year-on-year to 4.6 million lbs, with crop year-to-date shipments rising to 251 million lbs, but 31% behind the year-ago period.

Turkey and the United Arab Emirates accounted for the lion’s share of inshell exports, with 1.4 million lbs and 1.5 million lbs respectively shipped to the two countries in July. Traders said the high volumes shipped to the two countries reflect the competitive prices being offered by U.S. packers for current crop inshell as they cleared storage space ahead of the harvest.

U.S. Chandler JL inshell traded above $1.10/lb FAS in January before prices began to decline in the following months, according to Stratamarkets’ data. Prices averaged $0.96/lb FAS in June, when the majority of the July shipments were likely booked.