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W Wichita rebounds as supply tightens  

March 18, 2024

The assessed W Wichita price rose in the global pecan market during the week ending on Monday as the supply of North American inshell continues to dwindle. 

Driving the move: Low inshell supply across the U.S. and Mexico are pushing the price of W Wichita up as sheller demand for it increases.  

The item increased to $3.42/pt CNF Texas, up 7 cents/pt during the March 9-18 assessment period. That’s one week after the price dropped by 3 cents/pt. The price is now well above its 24-week average.  

Sales of Eastern-variety inshell, which growers say is effectively sold out, remained scarce. Stuart traded once at $3.10/pt FOB Georgia. There were no reported trades, bids, or offers for Desirable.  

There are now less than 15 million lbs of inshell left in storage in the U.S. and about the same amount in Mexico, according to information from the American Pecan Council and informal surveys of growers. Inshell sales within Mexico are brisk, with the local hand-cracked market moving at a steady pace because of the high value of the peso relative to the U.S. dollar, sources say.   

The Mexican peso is currently trading at about 16.86 per dollar, its highest value compared to the dollar since 2015.   

“Because the peso is high, it makes sense for Mexican growers to make the sales within Mexico, so the hand-cracked market around Mexico City is growing,” a sheller in Mexico said on Thursday. “They are weighing whether to sell it to shellers, when many times, they can get better prices selling on the local markets.”  

Many U.S. and Mexican growers are reluctant to offer, preferring instead to hold their pecans in storage until prices increase. And with the dwindling supply and competition among shellers, they anticipate that prices could rise within the next few weeks.   

“Traditionally by this time. people are already in cold storage and will try to hold longer,” a grower in Mexico said on Friday.  “They are hoping that prices will go up more.”    

Kernel market 

The assessed Fancy Jr Mam H price rose by 5 cents to $4.63/lb FOB Texas on brisk trading. Stratamarkets recorded 13 trades during the period compared to two in the previous period.  

The range of Fancy Jr Mam H trades was unusually wide, with prices recorded from $4.53-$4.80/lb FOB Texas-equivalent.  

Fancy Mam H traded twice at $4.70/lb FOB Texas and $4.55/lb EXW Mexico. Stratamarkets assessed the item at $4.64/lb FOB Texas, up 4 cents and bringing it to a 1-cent premium to the Fancy Jr Mam H.   

Trade for pieces remained limited. Fancy Med Pcs was offered just one time at $4.60/lb FOB Texas, while Fancy Lge Pcs traded twice for $4.50/lb

CFR Europe and $4.60/lb FOB Texas. 

Driving the moves: Some shellers are still scrambling to buy kernel from other shellers to fill contracts with end-users signed earlier in the crop year.  

“We have been very conservative on offering this week because we’re behind on delivery,” said one U.S. trader on Friday. “Maybe we oversold and didn’t estimate production timelines very well.” 

Some shellers can’t get the material they need for their own contracts. Because of that, they also have less to sell to other shellers.  

“We are precuring from shellers who are also overwhelmed,” the U.S. trader said. “They are actively buying (inshell) and shelling, but they are behind.”      

Some shellers are waiting on the sidelines for kernel prices to rise. They say they are unwilling to pay the current market rates for inshell when kernel prices are not selling at enough of a premium to make a profit.   

“We are still holding off,” said a second Mexican sheller on Thursday. “The margins are too tight for shellers in this moment. I do think the market will pick up. There is no inventory.”  

“It doesn’t make sense to sell at these prices,” the sheller added. “I have to go out and buy expensive inshell.” 

The Fancy Jr Mam H to W Wichita premium decreased by 2 cents this week to $1.21/lb. 

Tell me more: Kernel demand in Europe has slowed a bit compared to a few weeks ago, but there are still sales to be had, mostly in the spot market instead of in contract sales, sources said.