New US demand fails to lift kernel prices 

November 13, 2023

Kernel prices declined in the global pecan market during the week ending on Friday even as a large U.S. supermarket solicited offers for millions of pounds of halves and pieces.

Fancy Jr Mam H shed 30 cents on the week on strong selling interest.  Sellers offered from $4.35-$4.75/lb FOB Texas equivalent levels, with multiple offers left open at the close of the November 4-10 assessment period. The item traded at lower levels in the inter-sheller market, but no trades were reported in the end-user market.

“We’ve been testing the market, offering at different levels, but we haven’t had anyone come to us to confirm,” a U.S.-based sheller said on Friday.

Shellers submitted fewer offers for pieces; no trades were reported. Assessed prices for Fancy Med Pcs and Fancy Lge Pcs fell 6 cents and 16 cents, respectively.

The price downturn came as shellers prepared offers for the U.S. supermarket’s 3.8 million lb tender – the first large solicitation from the U.S. this crop year. The purchase could set a floor for kernel prices as the crop year progresses and was therefore being closely watched by shellers.

The bulk of the tender, 2.2 million lbs, was for Fancy Jr Mam H. The remainder was for Fancy Mam H, pieces, topper halves, organic halves, and other material.

Offers were due by the end of the day on Friday. Shellers were expecting an announcement early this week, sources said.

Tight kernel price premiums to inshell were making it difficult to determine offer levels, said a second U.S. sheller who planned to offer into the tender. On Friday, the Fancy Jr Mam H premium to W Wichita IS fell to $1.06, down 9 cents on the week and below its 24-week average.

“Everyone right now is shooting in the dark,” the sheller said.

A sheller in Mexico reported raising kernel offer prices in response to tighter premiums.

“I think there is a lot of risk right now,” the sheller in Mexico said. “The kernels are not catching up to the prices of the inshell, and that is worrisome. It should by now be caught up.”

Kernel prices have been declining for months primarily on tepid global demand. Europe purchased last month but has been quiet since.

Still, shellers have expressed optimism that market fundamentals could soon turn in their favor and bolster prices. They note that they are beginning the new crop year with the lowest carry-over in years and that demand from the U.S. typically improves beginning in December.

“Demand is tight and my read on the market is that the domestic guys have not come in yet,” a third U.S. sheller said on Wednesday. “When that demand kicks in, I think we’ll see $5 halves.”


Prices for high-quality inshell continued to rise during the period though prices for shelling grade inshell softened.

Sellers in Georgia noted demand from giftpack buyers but reports about demand from China were mixed. Buyers in China purchased an estimated 30 million lbs of inshell from Mexico before turning their focus to the U.S., where they’ve contracted from 20-25 million lbs – nearly all from Georgia, sources said.

“China is still at it very heavily, which has this whole market propped up in Georgia,” a U.S. inshell trader said on Friday.

However, a second U.S. inshell trader said demand from China had quieted, adding that some buyers in China were asking to reduce volumes in previously booked contracts.

Desirable IS traded from $1.85-$1.90/lb (3.56-3.65/pt) FOB Georgia during the period. Stratamarkets assessed the item at $1.87/lb ($3.60/pt) FOB Georgia, up 4 cents/pt on the week. No trades were reported for Stuart IS.

Mexico-origin W Schley IS traded multiple times from $3.20-$3.30/pt FOB Mexico and U.S. Stratamarkets assessed W Wichita, a similar item, at $3.28/pt FOB Texas based on the W Schley IS trades.

Prices for sheller-grade inshell prices remained too high for most shellers given low kernel prices. Shellers said they planned to wait for demand from China and giftpack buyers to subside before entering the inshell market.

“Most shellers know that unless you absolutely have to get it, you don’t buy inshell right now,” the second U.S. sheller said.

Looking ahead

Market participants continued to monitor harvests in Mexico and the U.S. to gain clarity on supply.

In Mexico, growers have largely finished harvesting the Sonora crop but the harvest in other states in Mexico was three to four weeks delayed due primarily to excessive moisture and humidity, sources in Mexico said.

In the U.S., the harvest in Georgia was in full swing. Growers were reporting problems with green shucks, sticktights, and thicker-than-normal shells in some varieties.

Growers reported that the Georgia crop was off by one-third, yet it remained too early to determine if the final crop size in Georgia would be lower than previous years, according to a November 1 crop update published by the University of Georgia.

“It’s a moving target,” the report said.