Almonds

March rains made it one of the wettest months in 14 years. With the February bloom having concluded, it was good timing for the rain to arrive and deliver like it did. The Sierra Mountains also received over 56 feet of snow in March, which was the sixth highest in recorded history. Furthermore, that outcome is very critical for delivering water to all of the 
reservoirs for storage throughout the year. This should also translate to a strong source of irrigation water for the growers as the aquifers replenish throughout the state. Which then leads to even stronger water allocations than we have seen for some time. 

The Almond Board of California released the “February Position Report” on Tuesday, March 12th and we are now past the halfway point of the 2023/2024 crop year. With crop receipts quickly coming to an end, it is all but confirmed that this year will be the third year in a row of a declining supply from the 2020/2021 crop year high. Expect the crop supply this year to top out around 2.458 billion pounds.

To date, the industry has shipped 1.60 billion pounds (averaging 228 million pounds per month thus far) and stands ahead of last year’s shipments by +5.57% year-to-date. Total shipments for February were 221.1 billion pounds. Domestic shipments of 58.79 million pounds was up 2.3% from a year ago. Total domestic shipments are flat to last year at 420 million pounds year-to-date. Expectations are for overall domestic shipments to stay consistent with last year. Meanwhile, export shipments were 162.3 million pounds shipped, off 13.8% from last year’s 188.3 million pounds and still ahead of total shipments +7.77% year-to-date. With month-to-month supply in Europe, we should see Europe continue to have demand throughout the rest of the crop year. However, with limited in-shell supply now in California, India, and the Middle East, it may trail off until the new crop year. Total sales for the month were 214.61 million pounds, up 13% versus last year’s sales of 190.27 million pounds. This was stronger than expected considering growers took time off of aggressively selling during the early bloom period. 

Overall, this indicated demand is still active even at the high-end price levels we saw in early-to-mid February. Now that bloom is over, we expect California will continue to sell aggressively for nearby periods. Additionally, willingness to sell for the farther out months of the crop year could also lead to an increase in the sales number for future reports. 

Commitments for the 2023 crop year stand at 630.90 million pounds, which is down 20% versus the 784.69 million pounds from last year. Commitments remain consistent as California’s sales strategy has continued to offer nearby shipments only. We will likely see this change now that bloom went well and the growing season is looking even stronger with 
plenty of water. Uncommitted inventory currently sits at 928.82 million pounds, down 7.78% versus last year’s 1.007 billion pounds. This is consistent with a smaller crop expectation and the strong shipments we saw during the first half of the crop year.

Cashews

In-shells:

• Arrivals are down about 25% compared to last year due to the late crops across all main growing regions within the Northern Hemisphere. Furthermore, the out-turn (in average) is lower compared to last year. While we are just starting to see the second flush coming in, the million-dollar question currently is if the losses and lower out-turns from the start of the season can be potentially made up during this crop cycle. On the other hand, weather forecasts differ per region, where some main growing areas have had very dry or continued showers and both events are not in favor of the fruit development.
• The Ivory Coast having lower out-turn versus last year is something to closely watch, as this could drive in-shell prices up since other regions will not be able to catch up to such a significant fall for the region. 
• India is the main demand driver for in-shells and their local crops are reported to be short. With the crops in Africa not promising at this stage, this region remains eager to continue covering for their needs. With Vietnam signaling towards a not so great crop coming and Cambodia’s crop at disparity due to the current Kernel prices, it’s most likely we will start to see more activity by Vietnam processors to cover Africa’s in-shell soon.

Kernels:

• The earlier spot squeeze cooled off during March. The delayed arrivals due to the Red Sea hassle has given processors some space to breath. Still, there is noticeable short-selling 
  happening on forward periods, especially in the European zone up until Q3 of 2025. This is something to monitor if this is a healthy choice as Kernel prices are likely at the bottom and continue to trade at disparity to current in-shell levels.  
• Consumption remains decent and a lot of promotions continued within the U.S. and European regions during the month. This will likely support the liquidation of excess positions of consumptive users.
• As stated, interest to cover way forward continues to be very strong as current Kernel prices are almost at all-time low for the last two decades. Support for such period by processors is little-to-none, hence a lot of speculative decisions are being taken by the industry. If markets and crops continue to bring unforeseen messages, this could have a major impact for some part of the import industry and we will likely continue to see a hand-to-mouth coverage strategy. In which, is again, an indictor of feeding constantly the spot market.

Hazelnuts

Supply side:

• The TMO is expected to be holding 120,000 metric tons of inventory and is expected to start selling post elections on March 30th.
• The supply situation has improved in March as prices soared to record levels and we saw interest from farmers and traders to sell. However, buying interest at high levels was limited. We still expect almost 400,000 metric tons to be available in Turkey, which is more than adequate.
• Prices touched the highs of 8,50 $/kg, but later have corrected below 8,00 $/kg due to the increase in sellers, but limited buyers.
• The Exporter’s Association has announced a subjective crop estimate of 805,000 metric tons for the 2024 season. The weather, too, has been conducive in March and has been conducive for the crop development.

Demand side:

• We continue to see most buyers preferring to cover only their immediate requirements due to high prices.
• Many buyers had to cover some volumes at higher prices for immediate requirements, but have some positions open for Q3 to be covered. We expect the demand to hold the 
  market for some time.
• Turkish exports for the season as of the end of January stand at 185,000 against 197,000 for the same period last year – lower by almost 6%. We expect demand fundamentals to be tight with inflation woes and other ingredient prices like Cocoa at an all-time high.

Outlook on pricing: Prices have softened as expected from record highs. However, fundamentals point to a further correction. Furthermore, expectations of the largest player still has yet to cover some of its demand and because some of the European buyers are yet to cover, this can keep the market supported in the short term. In the long term, as the TMO sells its stock and because next year’s crop development is good, supply is expected to improve, thus triggering further correction in prices. Cocoa prices might effect consumption and demand for Q4 and onwards, which needs to be closely monitored.

Pistachios

Pistachio crop receipts 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 crop yet, surpassing the previous record set in 2021 of 1.16 billion pounds.

February shipments continued the strong momentum with a record for the month at 111 million pounds. This represents a 48% increase compared to the same period last year and a 65% year-over-year growth. The driving force continues to be exports, with February’s export shipments totaling 82 million pounds. Exports are now up +91% year-over-year. 

All eyes will now turn to the April bloom period in California which is upon us. While California pistachio crops will continue to grow for the foreseeable future due to the large non-bearing acreage in the ground, most industry experts expect the 2024 crop to be lower than last year’s 1.5 billion pounds due to this being an “off year”. Current early estimates shows a range primarily between 1.1 and 1.3 billion pounds. However, it is still too early to tell as we have not even experienced bloom yet.

Demand for pistachios remains healthy with shipments keeping pace with the increased supply. This has led to prices increasing steadily since the opening levels since last November. It is still too early to predict next year’s crop size, but speculation to a potentially smaller new crop has resulted in some packers holding product in hopes of obtaining a premium in the scenario where a shorter crop materializes.

Macadamias

Key developments in major macadamia growing regions:

• South Africa: Although a delay of 2-3 weeks from last year, the harvest period has started in South Africa with the expected crop to increase by nearly 14% this year, from 78,000 metric ton in-shells last year to 90,000 metric tons this year. However, macadamia prices had an upswing in March with the prices of nut in-shell (NIS) moving up due to China’s increasing in-shell demand throughout the region. 
  
• Australia: The 2024 Australian macadamia crop is forecasted to reach 56,000 metric ton in-shells, marking a 16% rise from last year’s 48,400 metric tons which was affected by low yields and decreased farm gate prices. Despite some regions facing initial harvest challenges due to recent rainfall, favorable growing conditions are anticipated to enhance Kernel recoveries, showing promising signs. 
• Kenya: Ever since the government opened up the NIS export from Kenya, the buying price of in-shell nuts (which used to be under 100 shillings) has since moved up to 125 - 140 shillings. Local processors are finding it hard to collect in-shell nuts from the farmer groups and have to shell out more to buy NIS. As a result, this has caused Kernel prices to 
  move up during the past few weeks. Also, Kernel availability in Kenya remains low since processors have scaled down their production, owing to lower NIS availability.
• China: The macadamia imports into China is experiencing steady growth due to the increasing consumer demand for healthy snacks and ingredients. China has become one of the largest importers of macadamia nuts, driven by factors such as rising disposable incomes, changing dietary preferences, and a growing awareness of the health benefits 
  associated with macadamia consumption. Strong demand from China continues to drive the market up, leading to an overall price increase of 10% - 20% across all origins.

Outlook on Pricing: Macadamia prices have been gaining strength over the last few weeks for both in-shell as well as Kernels. Strong demand from the U.S., China, and Europe, low carry forward stock, and limited Kernel availability due to higher in-shell volume contracted by China may cause prices to increase more in the coming months. 

Peanuts

United States: 2023 crop production is being reported by the USDA Federal State as just shy of 3 million farmer-stock tons, with close to 29,000 tons being Seg 2/3. Production being below 3 million, especially with quality issues, creates a very tightly supplied market. Demand for U.S. peanuts continues to hold stable in the 3 million ton range, in part due to increased exports. Experts are estimating a possible 3% - 6% increase in acres for 2024 crop plantings, which is actually needed (especially if there are yield issues again) to get the U.S. back to a comfortable supply. Planting intentions was released Friday, March 28th - more information to come on that. This will be a very early (and thus historically inaccurate) prediction of what will be planted, it is just too early to know for sure. Plantings should begin within the next month. 

Activity in the U.S. kernel market has continued to be fairly active with interest in both 2024 and 2025 calendar coverage. Kernel prices for the 2023 crop are holding firm in the upper $0.60’s and experiencing upward pressure as inventory gets tighter and tighter. Offers for prompt or nearby positions are extremely limited to not available. Kernel prices for the 2024 crop are in the upper $0.50’s to low $0.60’s, depending on spec, with some trading.