Almonds

Relatively speaking, California has had a dry January as the state depends on the Seirra snowpack for half of its water. Currently, the snow-pack stands at 52% to normal, a stark contrast to this same time a year ago when the Sierra’s were at 200% to normal. However, the state is currently in the middle of an “atmospheric river” and is expected to bring precipitation throughout the entire state lasting for several more days. Yet, it is expected to be a “warm storm”, which would bring precipitation as opposed to a lot of snow with only one foot expected. 

Current receipts stand at 2.23 billion pounds, down 6.2% from last year, but expectations suggest a crop size likely surpassing 2.4 billion pounds - which would be short of the 2.6 billion pounds forecasted.

Shipments have remained strong through Q4 of 2023 and are predicted to continue on-trend in January with industry expectations of 230 million pounds. While not setting any records, it has put the industry in a position of strength with 1.145 billion pounds shipped to date and almost 10% ahead of last year at this time. With a shorter crop and strong shipments, expectations are for a much lower carry-out this year and on track to bring it down to a more comfortable range of 550 million pounds versus this year’s 800 million pounds. Great strides in getting supply to match demand. 

To recap the “December Position Report” which was released in January, domestic shipments were 56.68 million pounds, up 8% versus last year’s 52.47 million pounds. This positive number for the domestic market brings total shipments flat to last year (+0.52%). Export shipments were 172.72 million pounds, which is 12.2% up versus last year’s 153.88 million pounds. Export shipments have improved month over month for the fourth straight month and represents the second-strongest December in history. We can see China/HK/Vietnam with a sizable increase, up 391% FTM and 21% year-to-date, in anticipation of Chinese New Year coming up on February 10th. All key destinations stayed ahead year-to-date, while total exports are up 13.59% year-to-date. 

Sales & Commitments: Total sales for the month were 219.42 million pounds, down 7% versus last year’s sales of 234.91 million pounds. Lower sales in December may be attributed to recent increased bullishness of sellers, and a lack of willingness to offer out for further periods. Commitments for the new crop year stand at 637.43 million pounds, which is down 11% versus the 719.71 million pounds from last year - in line if the crop is lower than last year’s crop size. Uncommitted inventory currently sits at 1.20 billion pounds, down 14.4% versus last year’s 1.40 billion pounds. This number continues to move upward due to the late harvest, delaying receipts by ~1 month. 

Cashews

In-shells:

• The delayed arrivals of Tanzania in-shells into Asia started to cause shortages on the processors end, mainly in India. This has resulted in increased spot pricing of readily available in-shell of other origins.
• Demand for the new in-shell from the Northern Hemisphere crop is decent, driven by Ghana as in-shell is currently the only variety available. Most Asian processors are pushing for prompt shipment offers, which are challenging for exporters as the in-shell available from Ghana is still mostly under the drying process. Minimum farmer pricing in the Ivory Coast is expected to be declared in the next 7-10 days and expectations of pricing remains fairly flat versus last year. It is still too early to determine the overall crop size and quality in West Africa as we will need to see how the weather will be during the main drying season. Freight rates have increased versus last year, which will impact the overall final prices for Asian processors. 
• Asian crops are expected to be available by the end of February and onwards. With Vietnam closing for the Tet holiday, there won’t be much processing done during the first half of February. As a result, this will likely continue to put pressure on both ends of the industry. 

Kernels:

• There is a clear spot squeeze observed in our main destinations markets (U.S. and Europe) as the hassle around the Red Sea is causing delays in arrivals. Furthermore, both destination markets turned in recent months to a more spot and/or hand-to-mouth coverage than usual. Main grades are not available on spot, which is driving the spot pricing upwards versus origin prices.
• Consumption continues to pick up and recover after a strong Q4 of 2023. The new year (2024) started off with ongoing promotions, which continues to stimulate overall consumption. 
• Interest to cover long term is strong and the challenge remains finding the support. With the in-shell season just kicking off, plus pricing and quality being unclear, the Kernel processors are not keen to offer too much far forward and would rather wait until Vietnam opens after their Tet break.

Walnuts

Walnut crop receipts for December hit 799,307 tons, a 7.6% increase from last December and exceeding the 5-year December average by 13.9%. This surpasses the original crop estimate of 760,000 tons by 39,307 tons (+5.2%) and the 2020 December record of 764,649 tons by 4%. Officially, this marks the largest walnut crop in California’s history.

December shipments continued the strong performance of recent months, totaling 85,779 tons, a 12.9% increase from the previous December. Exports saw an encouraging rise, with shipments totaling 64,189 tons (+17.9%), while domestic shipments remained steady at 21,590 tons (+0.4%) compared to the same period last year.

Total shipments have now reached 303,245 tons, reflecting a 10.7% year-over-year increase. This positive performance is primarily driven by domestic shipments, currently up 14.7%, while exports are also performing well at +8.2% yearover-year. Key markets in Europe and Asia have demonstrated strong demand, with year-over-year increases of +22% and +19%, respectively. However, exports to the Middle East are still experiencing a lag, down 7% year-over-year, with Turkey being the outlier at +33% year-over-year.

Reported commitments in December reached 240,818 tons, a 0.72% increase from the same period last year. Pricing remained stable in December, showing signs of bottoming out. This stability contributed to a 14.8% increase in new sales compared to November and a 6% increase compared to the same period last year. The walnut market appears to have rebounded after a challenging 2022 crop, with the quality and pricing of this fresh crop attracting buyers in key markets. While total shipments continue to perform well compared to the previous year, they still fall short relative to pre-2020 levels, particularly on the export side (-18%). The demand needs to pick up in the export market for grower returns to reach acceptable levels. 

Chile: Chile’s 2023 crop volume is expected to fall below initial forecasts. The crop receipts for 2023 are projected to be approximately 170,000 metric tons, which is a 9% decrease compared to last year’s crop of 187,000 metric tons, and a 12.5% decline from the anticipated 192,000 metric tons for this year. Shipments in December were down 40% versus last year, but remain flat year-over-year (-1%). Chile seems to have experienced a shift in export patterns, observing a decline in shipments to the Middle East (-27.9%) and Europe (-15.9%), while seeing an increase in shipments to Asia (+70.2%). Notably, the Indian market stood out with a 94.9% year-over-year increase in walnut shipments.

China: China’s projected 2023 crop capacity remains flat at 1.4 million metric tons; however, the actual harvest outcome is yet to be determined. Chinese walnut production is primarily driven by smaller farmers, posing challenges in collecting accurate data. Nonetheless, the increase in labor and capital costs mirrors the difficulties faced by the U.S. industry. For their 2022 crop, the projected carry-out is set to rise to 120,000 metric tons, resulting in a forecasted total supply of 1.52 million metric tons for the 2023 crop and signifying a 5% increase of 70,000 metric tons compared to the 2022 crop total supply.

Hazelnuts

Supply side:

• The season has now entered the second half. Unlike a normal season, we’re still seeing a lot of inventory in Turkey with farmers/traders still unwilling to sell off their stocks in expectation of better prices.
• We experienced a sharp upward price movement in the initial phase of the season, due to a shorter crop speculation. Prices stabilized around 95 TL/kg for most parts of November/December (around 6,50 $/kg).
• The largest buyer seems to have covered a large part of their requirement and might stay put for some time.
• Prices have moved up significantly in January due to hoarding/constrained supply from the farmers/traders. We believe this price increase is speculative and has touched $7,50/kg - the highest in 5 years.
• The TMO continues to carry an almost 120,000 metric ton crop, and its future move is also expected to have a significant impact.

Demand side:

• We continue to see most buyers preferring to cover only their immediate requirements due to high prices.
• Many buyers are still covering their Q1-Q2 demand, which has added fuel to the heated market for a while. Though the volumes are low, the sentiment is that Europe is uncovered and is making the farmers hold further.
• Turkish exports for the season as of the end of January stand at 138,000 against 151,000 for the same period last year - lower by almost 10%. We expect demand fundamentals to be tight with inflation woes and other ingredient prices, like Cocoa, at an all time high.

Outlook on pricing: Late December and early January has seen a sudden jump in prices without much underlying trade. This is primarily due to supply being constrained by farmers and traders. We believe the price increase is speculative and will correct in a few weeks. The largest buyer has now covered a substantial portion of its demand but is expected to cover some more later. Post February, the 2024 crop news will take a centerstage as concerns around the stink bug and frost will get discussed.

Pistachios

Pistachio crop receipts for December remained flat at 1.49 billion pounds, exceeding the INC’s forecast by 35% and marking a 69% increase from last year’s crop of 884.1 million pounds. This harvest stands as California’s largest and surpassing the previous record set in 2021 at 1.16 billion pounds. The opening 2023 crop price was the lowest seen in decades. However, pricing has since rebounded ~10% on the back of strong demand.

December shipments continued the strong pace of previous months, reaching 165.4 million pounds, a 132.4% increase compared to the same period last year and a 73.3% year-over-year growth. The driving force continues to be exports, with December export shipments totaling 143.2 million pounds (+102.4% year-over-year). Notably, shipments to Europe saw a year-over-year increase of 117%, with Germany leading the gains at 35.5 million pounds (+260.5% year-overyear). Asia also remains a strong performer, with shipments reaching 254.5 million pounds (+118% year-over-year), with China taking a large share of those shipments at 203.3 million pounds (+158% year-over-year).

The global demand for pistachios appears strong, indicating a balance with the increased supply. As of December, pricing has maintained stable, with expectations of prices firming up as the supply decreases. To date, approximately 31% of this year’s total supply has been shipped. If the ongoing positive trend in shipments continues, it could signify that the market can accommodate additional pistachio supply and confirm consumer preferences for pistachios.

Macadamias

Key developments in major macadamia growing regions:

• South Africa: The 2024 season is slowly progressing with good arrivals from farms. The nut in-shell processing is expected to start from early February which would give a better update on this year’s quality. Processors have started taking short positions at current market levels which is already quite high due to good demand from Chinese buyers. The growers are expecting the nut in-shell price to increase by a minimum of 12-15% this season as compared to last year. This high price of NIS should also lead to an increase in Kernel price from South Africa. 
  
• Australia: Most of the macadamia growing regions experienced dry conditions throughout 2023. The dry weather conditions have thankfully limited the impact of pests and diseases that thrive during wet seasons. During the months of August/September of 2023, it was one of the best flowering seasons on record which laid a strong foundation for this year’s crop. This factor, along with considerable quantity of new trees set to come into bearing in 2024, provides the platform for a positive season in 2024. The overall crop quality of Australia is expected to be better than last year with better nut counts and higher yields. 
• Kenya: The Kenya government’s move to allow in-shell trading has attracted nut in-shell trades to China, however quality still remains a challenge. Kenya continues to struggle with lower yields due to the inherent nature of the farm size and poor farm practices. The final crop output in 2024 is expected to be 45,000 metric tons, which is higher than last year’s volume of 41,150 metric tons. 
• China: China is preparing for the New Year holiday as the majority of buyers and processors have closed their operations from January end. Demand from China is expected to subside in the coming weeks. In 2023, Chinese macadamia quality had an increase of 1% SKR (Saleable Kernel Recovery) and is expected to increase further in 2024 as new plantation’s start yielding. After a few years of rapid expansion, the planting area of macadamia nuts is stable at around 309,000 hectares as per the official data. Yunnan province produced the most macadamia nuts in China, followed by Guangxi and Guangdong. Industry sources in Yunnan expect the country’s macadamia production to keep increasing in years to come as more plantations begin bearing.

The excess inventory at the start of 2023 was slowly cleared up in Q3 & Q4. The significant price correction further helped with clearing up old carry-forward stock from 2022. The carry-forward inventory for 2024 is quite low, with processors holding onto only non-liquid styles in hand. The future of the macadamia industry looks quite optimistic, with significant price increases for Q1 sales. Supply of Kernel’s in Q1of 2024 will be limited as all major origin’s will start offering new cargo for April/May deliveries. This might create a short-term supply pressure while increasing the price, however correction in the Kernel price can be seen post February as the demand for Chinese New Year subsides. Key factors that need to be monitored in the coming months include the quality of crop from South Africa & Malawi and demand of China post-holiday. These factors will help in determining the price trajectory for Macadamia nuts.

Peanuts

United States

National tonnage graded (as of January 23rd) is being reported by Federal State as 2,957,436 farmer stock tons. 28,344 tons of this is Seg 2/3 (with 25,543 tons being runners), and as mentioned last month, we are still seeing aflatoxin from some areas. These issues even further reduce edible product available. U.S. demand continues to hold up fairly well in the 3 million ton range. Though we have an estimated ~1.016 million ton 2022 crop carry-out, 2023 crop production below 3 million pounds, especially with quality issues, creates a very tightly supplied market as we move forward. It is pertinent that peanut acres do not decrease for 2024 plantings, and in fact, we could use an increase (especially if there are yield issues again) to get the U.S. back to a comfortable supply. 

Activity in the U.S. kernel market has picked up in the last few weeks, with interest in 2025 calendar coverage. Talk of prices for 2024 crop are in the upper $0.50’s to low $0.60’s, depending on spec, with very little trading. Until it is known what shellers will pay for 2024 crop farmer stock, they will remain hesitant to offer at these levels. Offers for prompt or nearby positions are extremely limited, with some materials unavailable. Kernel prices for the 2023 crop continue to hold firm in the upper $0.60’s and should do so at least until 2024 
crop planting intentions.