Nuts Market & Crop Update - Global

Almonds

During June we saw temperatures rise on average 3 degrees warmer than historic data shows. A continued heat dome is expected to remain through the next 10 day forecast with temperatures in the triple digits.

We also saw the May shipment report released on June 11th, and it was quietly the second largest shipping month for any May period in history. With 226 million pounds shipped +15.5% ahead of last year, this brings the industry to 5.25% ahead of last year to date. The industry has now shipped over 2.3 billion pounds of almonds through the current crop year. With only two months remaining of the current 2023-2024 season, it is evident by all accounts this will be the second largest year for overall shipments in almond history just behind the 2021 crop year when that year the industry production was 3.1 billion pounds. These shipments have not been without consequence, as we see pressure on remaining supply now with most sizes and grades harder to find each day. Please reach out if you are in need and we will do our best to supply you if possible.

With the crop receipts pretty much done, the production for the current year will settle near 2.44 billion pounds. Meanwhile, the subjective estimate suggests the crop will bounce back to 3.0 billion pounds following a decrease in production for the last three seasons. The objective estimate is right around the corner and many growers are now content to wait before selling any new crop at this time.

Objective Estimate: July 10, 2024
Position Report: July 11, 2024

Cashews

In-shells:

• In the first half of the month in-shell prices continued to be on the rise due to several factors like crop short fall & lower outturns. The export ban by the Ivorian Government continued, slightly in different set-up but still in a way that only local processors in Ivory Coast were able to cover their requirements for the entire season.
• Another key driver on the price rises were the defaults on existing contracts as in-shell traders were able to get easily 50-60% better value by re-trading the same quantity. This is of course not the way to operate, but traditionally seen this sector is very sensitive to price movements in either way.
• The next in-shell crops will come from the Southern-Hemisphere crops (East-Africa, Brazil, Indonesia), and currently reflecting just 15-20% of the global production. With the current tightness of iin-shell and ongoing interventions by local governments it needs to be seen how these crops will start opening for trade from September onwards.

Kernels:

• Kernel markets have been following the same trend of in-shells. Squeezed availability has led prices to multiyear high. Also defaults continued to happen on Kernel contracts which were closed at the beginning of the season at lower levels. Kernel processors continue to operate with low, and in some cases, negative margins. Postponements and/or cancellation requests on earlier contracts are part of the daily discussions with end customers.
• During the 2nd half of the month prices stopped rising due to better in-shell arrivals and even cooled down a bit. This hasn’t changed the sentiment as we will likely continue to see gaps in supply of raw material due to the earlier government interventions. Which will increase the number of active periods of coverage and keep feeding the spot market.
• With consumption numbers continued to show healthy growth and supply of Kernels likely to remain tight for some more time the destination markets will likely remain the key drivers on the price developments in near term future.

Hazelnuts

Supply side:

• The current season is now nearing its close. It is expected that the trade will carry at least 60-70K MT of current season crop into the next season, apart from the 100K carried by TMO. TMO has offered its previous season crop @ 124 TL/kg but has few takers.
• The exporter’s association has announced a subjective crop estimate of 805K for the crop 2023-24. The INC has been a bit conservative @ 785K MT. Overall the weather has been generally conducive and crop development looks good.
• With buying mostly absent, prices have corrected further last month, now nearing 7 $/kg. We believe further downside to be limited, as TMO is expected to announce its new season price by July, which can support the market. Ferrero too is expected to source aggressively in the beginning of the season, further supporting the market in the initial phase. TMO price will now be the biggest trigger everyone awaits

Demand side:

• We continue to see most buyers preferring to cover only their immediate requirements.
• We have not seen the usual buying in June-July yet. As prices fall, buyers have covered any open current season requirements, but the Q4 requirements are still open, and we expect substantial buying interest to come up in the next few days.
• Turkish exports for the season end of January stand at 256K against 263K for the same period last year. Exports have caught up as Ferrero was able to source and export their requirement late in the season. We expect demand fundamentals to be tight with inflation woes and other ingredient prices like Cocoa being very high.

Outlook on pricing: Prices have slowly cooled off from the peak owing to good supply andweak demand. Further downside will be limited as TMO is expected to announce a ‘fair’ support price to the farmers for the coming season. Many large buyers are slowly looking to cover their Q4 requirements. The 2023 – 24 crop news has been encouraging. Supply seems more than adequate for coming season.

Pistachios

Pistachios crop receipts remain unchanged at 1.49 billion lbs., a +69% increase from last year crop of 884.1 million lbs. Gross inventory available was 1.65 billion lbs and coupled with shrinkage and other adjustments of 242 million lbs, leads to adjusted beginning inventory of 1.41 billion lbs.

Shipments have slowed, with May total shipments reaching 71 million lbs, a -19% decrease YoY basis. May Exports at only 50 million lbs, a reduction of -27%, is the key driver for overall shipment trend.

While may shipment numbers are down, total year to date shipments stand at 974.4 million lbs, which is a +30% increase compared to last year. Exports to China (up +121% YoY) and EU (up +64% YoY) are the dominant reasons for shipment growth.

Overall inventory available at origin is 440 million lbs. New Crop estimates are in the range of 1.0-1.2 billions lbs and with expected low carryout, this will provide price support.

Macadamias

Key developments in major macadamia growing regions:

• Australia: Heavy rainfall in early April caused delays in harvesting in the growing areas. The crop is still forecasted at 56,000 MT in-shell, surpassing last year’s 48,400 MT. NIS offers are low at the moment as most of the inshell volumes have been contracted. 
• South Africa: Harvesting and processing have begun in full swing in South Africa. Growers remain optimistic about this year’s projected crop of 90,000 MT. NIS prices have remained flat in the past month. Medium-scale processors are holding off kernel offers for near term as they have sold off for this period. This is resulting in lower kernel offers in the short term.
• Kenya: Kernel offers remain low as processors are working on covering inshells before
  making new offers for coming season.

Outlook on pricing: Macadamia prices remained flat over the last few weeks for both in-shell and kernels. Demand from the US, China and EU looks good and hence prices look to be range bound of +/- 15-20c in nearbys.

Peanuts

2024 U.S. crop plantings are essentially complete. Now, we turn to the weather. Temperatures are predicted to be warmer than average throughout the summer and into winter. Experts are also calling for potential record-breaking activity this hurricane season (June – Nov). Tropical activity is necessary to bring essential rains during the growing season, BUT which areas will see these systems and how timely will they occur? Soil moisture was getting very dry across all growing regions, especially in the SE and V/C, which puts stress on the plants and could impact yields. The SE & Delta regions have been receiving scattered showers the past few days, which will help
some areas. Weather is the biggest question mark right now.

Demand for U.S. peanuts continues to hold stable in the 3M ton range, in part due to increased exports. It remains to be seen whether this increased export demand holds, as much of the influx was due to Argentina’s poor crop in 2023. USDA annual crop acreage report came out June 28th, predicting acreage up 6.8% (up from .05% in the original March estimate). FSA certified acres are reported at the end of July. We need an increase in production (somewhere around 3.25M tons) to get the U.S. back to a comfortable supply, but with an almost 7% increase from last year, optimal yields could produce a crop between 3.3M & 3.4M. With the small carry-in from 2023 crop, this won’t be a huge excess, but we certainly wouldn’t want back to back crops at that size (2024 & 2025). Despite what the actual planted acreage is, the production size will depend on yields. Quality is also yet to be determined. As mentioned above, much of the controlling factor is weather.

Activity in the U.S. kernel market is fairly quiet. Kernel prices for 2023 crop are holding firm in the upper $0.60’s, with very little trading. Offers for prompt or nearby positions are extremely limited to not available. Kernel prices for 2024 crop remain in the upper $0.50’s.