Walnut market update
The Walnut Marketing Board announced the September shipments at 21,917 inshell equivalent tons, 6,000 tons less than last year. Inshell shipments were 5.9 million pounds, 3.5 million pounds less that last September. Shelled shipments were 16.8 million pounds, 3.9 million pounds than last year. Total inshell equivalent shipments were 39,533 tons; 11,666 tons less than last year.
Due to the crop being two weeks late, both inshell and shelled production was impacted, with very little shipments from new crop taking place in September. This helps explain why both the Inshell and Shelled shipments were off from last years numbers.
Surprising, the early varieties did not receive the sunburn damage the industry expected. In addition, the serious damage (insect, mold) appear to be average as was the overall quality.
Most of the industry leaders believe the crop will come up short of the official California estimate of 350,000 tons. This early analysis’s is based on packers receiving less tonnage from orchards that had higher production last year.
The State’s survey projected the Chandlers would be off 22 percent, Serr’s off 18 percent and Hartley’s up by 9 percent. I have a problem accepting some of the state’s objective measurement of the 2006 crop. First, I find it hard to believe the Chandlers will be down 22 percent and the Hartley’s up by 9 percent. I believe the Chandlers will be off from last year but not by much. In addition, I believe the Hartley tonnage will not be up, but down from last year. I will let you know how it turns out later.
The market has remained stable and has firmed slightly since opening prices. Packers are offering Chandler LHP at $2.70, regular LHP at $2.60 and CHP at $2.40. Most bookings have been taking place five cents below these levels; however, the Combo material has firmed with most recent bookings taking place at the $2.40 level.
Because of the late crop, the inshell market will have some challenges meeting required shipment dates. I do not believe production will be able to make up for the late crop and there will be a lot of pressure to make early vessels to Europe.
I expect the walnut market to remain firm with the possibility of some strengthen if the crop continues to come up short. However, I do not see a big fluctuation one way or the other.
Please let me know if you have any questions or comments.