Winter has hit California, and we may see our first atmospheric storm of the year. The Pacific Northwest is getting the brunt of this storm (Cyclone Bomb) and California is getting brushed by the storms tail. As almond trees move to dormancy at this point, the heavy rain expected will be excellent for the soil. The extended forecast shows rain over the next ten days on and off.  

Last week’s October position report, released by the Almond Board of California, shows crop receipts by comparison to a year ago are up 38.3% at 1.85 billion pounds. Last year,  we were sitting at 1.33 billion pounds received. This may be one of the fastest harvests seen since the crops grew into the multi-billion of pounds of production.  Huller/ sheller capacity has never been stronger either as infrastructure has finally caught up to meet capacity needs.  Of course, with the hot July / August we had, it was critical to harvest and pick up quickly. The combination of the two has accelerated crop receipts to date. Most of California still believes the crop will fall short of the 2.8 billion pound estimate. We continue to see a firming market as growers are reluctant to sell too far forward. New crop sales in October were very strong, with 264.74 million pounds sold. Just in the last two months alone sales have been over 538 million pounds, only adding to the firmness.

Domestic shipments were superb, up 18.2%, with 67.44 million pounds shipped vs. last year’s 57.05 million pounds. Again, adding to grower confidence as sales and shipments are very strong. 

Export shipments were flat with 191 million pounds shipped, up a modest 0.3% versus a year ago 190.35 million pounds. While only up slightly, exports during this period were especially impressive as they were mainly comprised of Inshell, standards and a little bit of pollinators. Export is always about timing, and it is expected that many remain uncovered. We could see export shipments pick up in the weeks ahead as destination stocks are depleted. 

Commitments are a function of timing as well. The industry stands at 674 million pounds, slightly down .56% vs last year’s 677.5 million lbs. The export market coverage appears to be better than the domestic market from a historical perspective. This is a result of growers not willing to sell further out positions and a strategy of covering a quarter at a time. With uncommitted inventory sitting at 997 million pounds, up 32.4% vs. last year’s 753.3 million pounds, we will probably see this number continue to rise as more of the harvest comes in this month and the next. 

Land IQ’s Final Acreage Report was posted this week. The report shows bearing acreage revised upward to 1.383 million acres with 30,515 acres identified as abandoned, leading to a final bearing acreage estimate of 1.35 million acres. This would be roughly 20,000 acres down vs. the initial estimate of 2024, which remained unchanged vs. the 2023 crop. The non-bearing acres also came down from 189,000 acres in 2023 to 143,000 acres for 2024, another significant decrease. We have now seen bearing acreage trending down in California for the first time and this trend is expected to continue for the upcoming 2025 crop.

Upcoming Industry Milestones:

• Position Report:  December 17, 2024
• Almond Conference (almonds.com): December 10 - 12, 2024
• PTNPA Scottsdale AZ: January 17 - 20, 2025

Bullish Trends:

• The October shipment report was another strong report for California. Sales and commitments remain strong, demonstrating almonds are still a better value than other tree nuts. 
• Buyers are supporting current price levels as consumption is strong, leading to more buyer confidence. Prices may be here to stay. Previous price levels were not sustainable. 
• Production lines at the processors remain full. Given this, it is a leading indicator that demand continues as new price levels make their way into the supply chain. 

Bearish Trends:

• Higher prices may change buying practices. Deterring buyers from booking long spread business (which is California’s strategy) could lead to demand destruction. Higher prices are met with resistance as buyers come back in to buy. 
• With the crop rushing in, processor supply is at capacity putting pressure on storage. This may lead to a buying opportunity. 
• If receipts exceed expectations and the crop comes in at the estimate or larger, we may see a sudden pivot to the currently bullish perspective. Additionally, if the February bloom proves to be good weather and all is looking good, this will also have an impact on strategies that could lead to a buying opportunity.