The assessed Fancy Jr Mam H price fell 14 cents in the global pecan market during the week ending on Friday, dropping below its 24-week average for the first time in months on tepid demand. Most other assessed items also declined.
Fancy Jr Mam H traded four times during the Jan. 20-26 assessment period from $4.41-$4.52/lb FOB Texas-equivalent. A similar item, Fancy Mam H, traded at $4.75/lb DDP Laredo in the middle of the assessment period.
Fancy Med Pcs was the only kernel item to rise during the period. The item traded at $4.41/lb FOB Texas equivalent and 4.65/lb FOB Texas. It was assessed at $4.53/lb FOB Texas, up 4 cents on the week.
Fancy Lge Pcs traded at $4.40/lb FOB Texas and was offered at the same level. Stratamarkets assessed the item at $4.40/lb FOB Texas, down 16 cents. The move put the Fancy Jr Mam H premium to Fancy Lge Pcs at 4 cents.
Kernel trade was limited throughout the period. The biggest issue stalling trade was the wide range of trade and offer prices, which created uncertainty among market participants.
“The prices are all over the place,” said one U.S. sheller on Monday. “But the biggest difference is between Mexican and U.S. shellers.”
For example, U.S.-origin Fancy Jr Mam H traded at $4.52/lb FOB Texas equivalent, while Mexico-origin Fancy Jr Mam H traded at $4.41/lb FOB Texas, a discount of 11 cents from its U.S. counterpart.
The prices move put Fancy Jr Mam H once again at a discount to Fancy Med Pcs, with that discount settling at 9 cents on Friday. Fancy Jr Mam H had been valued at a premium to Fancy Med Pcs in recent weeks. This switch back makes sense, sources said.
“Even though there’s a short crop, you’re going to have more cutting stock,” said a second U.S. sheller. “Mexican shellers are doing a better job of cracking, and they are making more large pieces and halves.”
A revised USDA pecan crop forecast released on Wednesday pegged the 2023 crop at 271.45 million lbs, up from its previous estimate of 251.5 million lbs. But the Mexican crop will be lower this year, according to estimates from that country’s nut council, putting the total crop between the two countries at about 541 million lbs.
The USDA’s latest cold storage report shows that U.S. growers and shellers were holding just over 129 million inshell equivalent lbs at the end of December, a 14% drop from the same time last year.
Cold storage inventory is usually a mix of current and previous year stocks. The total amount in cold storage could be lower this year because a late crop in both Mexico and the western U.S. Other factors leading to the drop in cold storage inventory could be more urgency on the part of growers and shellers offload product sooner to get cash in hand and avoid taking on loans and storage costs.
“The crop is late, and people aren’t holding as much,” said a third U.S. sheller on Thursday.
However, the USDA numbers do not cover Mexican growers, who sources there say are still holding onto much of their supply on their farms or at sheller facilities.
“A lot of the guys are keeping their harvest in their barns until it gets warmer or prices move up higher,” said a Mexican grower on Wednesday.
W Wichita rose 3 cents/pt on active inter-sheller trading as well as interest from Chinese buyers.
“China is now getting its inshell product from Mexico,” said the grower in Mexico. “The interest from China is creating better support for pricing levels.”
The Chinese interest is also raising prices for shellers who are looking to buy from Mexican growers to fill spot sales and keep their plants open.
“The interest from China is forcing shellers to pay higher levels from the growers,” said the grower in Mexico.
All season, the spread between inshell items and Fancy Jr Mam Hs has remained below $1.50/lb, the amount that many shellers say they need to make a profit. This week, the Fancy Jr Mam H premium to W Wichita fell 18 cents to $1.13/
Most of the Eastern varieties of inshell are now mostly sold out, according to growers and shellers, so trade is limited.