![Market Update: Heat Dome and Shipping Pressures Affect Almond Industry](https://commodity-board.com/wordpress/wp-content/uploads/2024/07/Firefly-badem-agaclari-ve-badem-toplayan-2-kadin-39063_600x400.jpg)
Market Update: Heat Dome and Shipping Pressures Affect Almond Industry
Extreme Temperatures Expected
Temperatures throughout the growing region are expected to reach highs of 119 degrees in some areas. The heat dome is anticipated to last for 10 days, potentially catching up any delayed crops. Growers will be maximizing irrigation efforts to prevent excessive stress on the orchards.Thinly Traded Current Crop
The current almond crop continues to be thinly traded as concerns about supply linger towards the end of the crop year. This trend is likely to persist through harvest until the new crop becomes available and early orders are fulfilled. The May shipment report, released on June 11th, showed a record 226 million pounds shipped, a 15.5% increase from last year. This brings the total shipments for the current crop year to over 2.3 billion pounds, positioning this season to be the second-largest in history, just behind the 2020/21 crop year.Pressure on Current Stocks
The robust shipments have significantly pressured the remaining stocks. Popular varieties and grades are increasingly difficult to find. Processors are running low on final stocks, and while some supplies may still appear, consistent availability is not guaranteed.Supply and Demand Dynamics
The industry has faced three years of declining crop production coupled with improved demand, finally achieving a favorable supply-demand balance for growers. This year's crop is projected to be around 2.44 billion pounds, the lowest since the 2018/2019 crop year. The subjective estimate predicts a rebound to 3.0 billion pounds for the next crop, a critical figure as the industry approaches the objective estimate on July 10th, followed by the June position report on July 11th.Upcoming Industry Milestones
Objective Estimate: July 10, 2024Position Report: July 11, 2024Almond Market Trends - Week 26
Bullish Trends
The market has responded to the tight supply, with new crop pricing increasing as a result. New crop sales have already reached over 173 million pounds, more than three times last year's figures for the same period. Additionally, new sales for the current crop were 134 million pounds, an 18% increase from last year, contributing to a very tight transition with an expected carry-out of less than 450 million pounds. Even with a larger crop anticipated, the supply-demand balance appears favorable.Bearish Trends
If the objective estimate exceeds the predicted 3 billion pounds, it could disrupt the current balance. This is especially concerning given the rising global shipping costs, which have tripled in recent months due to container shortages. As supplies dwindle, there may be little to ship in August or September, leading to a slow start for the new crop year. The upcoming objective estimate will be crucial in shaping market decisions.The almond industry is navigating through a period of extreme weather, fluctuating supply, and shipping challenges. Stakeholders should closely monitor upcoming reports and market trends to make informed decisions. The next few weeks will be critical in determining the direction of the market and the strategies required to manage supply and demand effectively.
Source:Ofi
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