by Bill Morecraft
Blue Diamond Almonds
The ABC Position Report for the California almond industry revealed December shipments of 148.1 million lbs, 6% off of December 2013. YTD, this moves California almond shipments closer again to 10% off last year, the pace that the supply outlook suggests is most likely. The foundation for strong December shipments was North America and China. North American demand has been a picture of stability throughout the year. China reemerges with a year-over-year shipment increase of more than 130% for the first time in many months. The slight price moderation after early October appears to have reinvigorated short-term demand.
Without the west coast port situation significantly limiting exports, shipments in December 2014 demand would have exceeded December 2013 shipments.
California 2014 crop almond receipts hit 1.805 billion YTD on the ABC December Position Report. The 2014 almond crop projects to finish between 1.825 and 1.840 billion lbs.
The 2014 crop supply is ~ 57% committed through December. January demand for new commitments and shipments has been significant in several geographies, including North America, India, and China. January export shipments are likely to be constrained again by the west coast port slow downs, but shipments overall should reflect strong monthly demand again.
Market Perspective –
The YTD situation continues to gain clarity. The latest data clearly shows 2014 almond crop receipts falling below last year, topping out at 1.825-1.845 billion lbs (slightly higher than our last projection).
At the same time, YTD shipments continue to trend close to the level necessary to achieve an overall 10% reduction. YTD 2014 crop pricing continues to effectively balance supply and demand, with slight firming seen in late December to early January activity. As bloom approaches, the annual assessment of bloom risk and forward water supplies will again be evaluated. Now is the time to determine the appropriate inventory position to hedge before and after March 1. When filling export demand, buyers should be aware that lead times are lengthening due to the west coast port issues.