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Prices rebound following declines

June 18, 2024

Assessed kernel prices gained back lost ground in the global pecan market during the week ending on Monday as trade activity increased.

Driving the move: Demand returned to the market, and shellers were reluctant to lower offers given the perceived shortage of some items, particularly Fancy Jr Mam H.

What they’re saying: “Product is still short,” a U.S.-based sheller said on Monday. “There are not a lot of junior mammoths out there.”

Tell me more: Fancy Jr Mam H climbed by 25 cents during the June 10-17 assessment period. The price of Fancy Jr Mam H has been volatile in recent weeks, but the recent surge pushed it back above its 24-week average.

The item traded multiple times from $4.70-$4.80/lb FOB Texas. However, some of those trades were either for shipment periods outside the assessed prompt period or for mixed loads. The item was also offered multiple times, with the average offer price pegged at $4.70/lb FOB Texas equivalent after adjusting delivered prices to FOB Texas prices by subtracting for freight costs.

Fancy Mam H gained by 16 cents in less active trade. The item traded at $4.65/lb FOB Texas for prompt shipment and at $4.80/lb FOB Texas for Q4 2024 shipment. The latter trade was excluded from the assessment process because it fell outside the assessed shipment period.

The move left Fancy Mam H at a 5-cent discount to Fancy Jr Mam H, underscoring the reported tighter supply of Fancy Jr Mam H.

Fancy Med Pcs gained by 21 cents, though multiple offers were reported from $4.40-$4.98/lb FOB Texas equivalent. Fancy Lge Pcs increased by 31 cents. Trade activity was limited for both items.

Current month average prices for Fancy Med Pcs and Fancy Lge Pcs are 1-3 cents below average assessed prices in May.

In the inshell market, a verification tier three trade was reported for W Wichita at $3.70/pt FOB El Paso for 700,000 lbs. A sheller also reported selling a blend of large size inshell at $3.50/pt FOB Georgia, though the trade was confirmed on June 6, prior to the start of the current assessment period.

Inshell prices were assessed marginally higher on the week based on the activity. The moves caused the Fancy Jr Mam H premium to W Wichita to climb by 22 cents from a recent low last week of 94 cents to $1.16 on Monday.  

Look ahead

Demand from Europe will partly determine how kernel prices fare moving forward, and there were signs of bearishness in the market there, sources said.

The euro has declined against the dollar from $1.09 on May 17 to $1.07 on Monday, decreasing European purchasing power. And inventory levels in Europe appear to be sufficient for the near term.

“All of my customers are well stocked, and they don’t need to cover more,” a U.K. based trader said on June 10.

With trade for 2023 crop pecans slowing, market participants are increasingly focused on 2024 crop development in the U.S. and Mexico and upcoming crop forecasts. Depending on their outcomes, those forecasts have the potential to heighten market price volatility.