Treehouse Almond Market Update July 11th, 2023

Ahead of the much-anticipated Objective Crop Estimate (due out 7/12), the June Position report does not offer much revelation. June shipments of 186.6 million lbs failed to come close to previous June shipments of 278 million lbs (2^nd largest shipment month ever recorded). Historically, 186 million lbs of shipments would be a positive number as its the 3^rd largest June shipment ever record. However, as the saying goes, “the past is the past”, with shipments down 33% for the month and YTD shipments down 3.5% California sellers are posed to carry-in an excess of 750 million lbs into the 2023 crop.  A stark contrast from just 3 months ago when California was positioned to reduce the carry-in to sub 700 million lbs until inclement bloom weather caused sellers to vacate the market thus shutting off sales and limiting future shipment potential.

Exports accounted for 125.8 million lbs, down 34.4% from previous June and are now down 2.2% YTD compared to end of March when exports were tracking 12% ahead of previous year. Domestic shipments of 60.8 million lbs are down 4.9% for the month and down 6.7% YTD.

Some Callouts:

1. Western Europe shipments of 44.4 million lbs are down 43% compared to previous June which were largely boosted by logistical delays causing buyers to front load inventories to meet holiday demand. Shipments of 44.4 million lbs are more or less at parity with pre-Covid June shipments for the region. Although, YTD shipments down 12% make it impossible to ignore inflationary pressures as well as increased EU supply resulting in YTD shipments retracting back to pre-2020 levels.
2. India shipped 15.45 million lbs for the month of June, this is down 60% from the 33.9 million lbs shipped last June. Lower than average spring temperatures has slowed the 2023 crop progression pushing back expected harvest dates 10-14 days later than normal. To meet November Diwali demand, India will need to cover a bulk of its supply from 2022 crop which today is holding a 10-12 cent premium over new crop September shipments. Shipments to India over the next two months will be critical if sellers hope to reduce the carry in position and gain any sort of momentum into new crop.
3. Middle East continued its slowdown for the 3^rd consecutive month with shipments of 12.8 million lbs down from 33.2 million lbs last June. YTD shipments are now 11% ahead of last year.

With one month left to be reported in the 2022 season, total shipments are now trailing 3.5% from last year’s pace. A disappointing position considering shipments just three months ago were tracking 6.85% ahead.

Current crop:   New sales of 154.7 lbs were up 30% compared to 119 million lbs a year ago, which is the largest June sales number on record. Uncommitted inventory now sits at 525 million lbs which is a modest improvement of 20.5 million lbs less (3.76% less) than the end of June last season.

New crop:   New sales of 65 million lbs in June bring the total sales of new crop to 122.4 million lbs. Using the Subjective Estimate of 2.5 billion (Objective Estimate due out tomorrow), this puts 2023 crop sold percentage at 4.9% compared to 9.3% a year ago which was notably a slow start to the season.

The slow start should not come as much surprise, sellers have remained tight gripped on new crop, banking on expectations that the crop will not materialize while buyers remained equally patient preferring to pass on the rumor and buy the fact.

Tomorrow’s Objective Crop Forecast comes highly anticipated as both buyers and sellers look to consolidate opinions and solidify a starting position for the 2023 crop campaign.

Position Report – June 2023