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Western inshell rises as kernel prices move in mixed directions

June 4, 2024

The assessed W Wichita inshell price rose in the global pecan market during the week ending on Monday on increased sheller demand. 

Driving the moves: At least one U.S. sheller bought about 1 million lbs of W Wichita from several  U.S. growers during the May 27-June 3 assessment period at $3.50/pt FOB Texas farmgate, sources said on Friday. About 3 million lbs of W Wichita traded at $3.50/pt FOB Texas plant last month.

What they’re saying: “The shellers have realized that there are not enough good quality pecans left on the market for them to meet their contracts,” said one U.S. grower on Friday.

Tell me more: The inshell sales brought the assessed price of W Wichita to a crop-year high of $3.54/pt CNF Texas after accounting for freight from farmgate to plant. It’s the second week in a row that the assessed W Wichita price has risen to crop-year highs. Last week, W Wichita hit a crop-year high of $3.50/pt CNF Texas. 

“This jump…is the biggest I’ve seen in recent memory,” said the U.S. grower on Friday. “It was hovering at $3.30 for so long and then finally jumped to $3.35 and then $3.40 and now we’re here.”

Last year, W Wichita hit a crop-year high of $3.65/pt CNF Texas on June 30. 

In Mexico, nearly all of the reported sales of inshell went to the Mexico City market for hand cracking instead of northern Mexico shellers, most of whom have paused buying due to tepid demand. 

“They have all their needs already covered,” said a Mexican grower on Friday. “They haven’t been able to push up the prices and make more sales, so they can’t pay the $3.45 or $3.50 a point with kernel sales what they are now.”

However, sales to the local market in Mexico for hand cracking were also slower than usual as Mexico dealt with record heat and the impending federal elections on Sunday. 

“No one is sure the effect the election will have,” said one Mexican grower on Friday before the elections happened. “And it has been so very hot.”  

Kernel sales slowed to a trickle during the assessment period, with many shellers saying they had received few to no inquiries.

“I haven’t even made an offer all week,” said one U.S. sheller on Friday. “Nobody is asking for anything. Everyone seems to be covered.”

Some shellers were active in the inter-sheller market. 

“Right now, most of the business is between shellers, trading sizes for what they need,” said the first U.S. sheller. “They are calling around and saying ‘Hey, do you need this? I’ve got it.’ Everyone is in the same boat.” 

Fancy Jr Mam H traded just once for the second consecutive week. It was assessed at parity to its 24-week average. 

Trade for Fancy Mam H was more active. It was assessed at a 3-cent premium to Fancy Jr Mam H. Assessed pieces prices rose. 

South Africa

Prices for South African-origin inshell rose as trade activity with China increased. 

Three containers of South Africa-origin Wichita traded at $4.90/kg CIF China for a 58% meat yield and 155 count/kg, up by 5 cents from last week for similar-quality inshell. Three loads of Wichita also traded at $5.10/kg CIF China for a 58% meat yield and 130 count/kg.

There was also a trade of six containers of South African-origin Choctaw at $4.85/kg CIF China for a 58% meat yield and 115 count/kg, and a trade of eight containers of 105count/kg Choctaw for $5.05/kg.

Chinese buyers are willing to spend more because of this year’s better quality Choctaw and higher-yield Wichita variety, South African growers said.

“The buyers are learning that the quality of the Choctaw is good,” said the South African grower on Monday. “The quality of the Wichita is also good, but the sizes are smaller than last year, with higher meat yield.” 

While sales of South African-origin inshell are at higher prices than they were during the last assessment period, they are still not back up to April levels, when trades from South Africa to China ranged from $5-5.30 CFR China. 

Cold weather has arrived in South Africa, with the first frost expected this week. That means harvest, which started a couple of weeks ago, will kick into high gear. 

Look ahead

U.S. shellers are still waiting to hear back from the USDA on a request they made last month to initiate a second Section 32 purchase of pecan pieces. 

Earlier this year, the federal government contracted 6.3 million lbs of pieces from U.S. shellers for shipments from April to August. Now, shellers, growers, and a Washington lobbyist hope the government will agree to help trim down more of the supply. 

“We didn’t ask for a specific volume amount, but they know how badly we need it,” said a pecan lobbyist on Friday.  On Monday, a USDA press officer said the agency had “no information to provide on future solicitation.”