R.L. “Pete” Turner November 24, 2010
WALNUT MARKET/CROP REPORT
CROP:
It is believed that 95 percent of the 2010 crop has been harvested and delivered to the packers. The other 5 percent is either at the hullers or being held at grower facilities.
The quality of the 2010 crop is well above average with a very high percentage of light material. However, because the trees held a large portion of their second and third sets this year, the walnut sizes are coming in much smaller than normal.
It does not appear that the heavy rains during late harvest had much effect on the quality. Very few walnuts were caught on the ground as most growers rush their harvest in order to beat the rains. The material that did get caught in the rain was mostly assembled in edge-rows, thus, enabling the growers to complete their harvest in between storms. In any event, most post rain walnuts will not be utilized for the inshell market, but will be dispatched to the packers shelling operation.
There is no doubt that the 2010 crop will be larger than last year’s record crop (436,000 tons). The question is…by how much. In the state’s four major growing regions, the tonnage in the south seems to be well ahead of last year’s production. This also seems to be the case in some of the northern growing regions. However, the tonnage from the mid-valley areas seems to be only 8-10 percent ahead of last year’s numbers.
That being said, most industry leaders believe the crop will be closer to 480,000 tons rather than the 510,000 tons forecasted by NASS. However, the final outcome will be whether the Chandlers reach the number previously projected by NASS. My guess, they will not.
October shipments of 94,000 tons were less than the 100,000 tons I forecasted earlier; but still 7,000 tons ahead of last October’s shipments (87,000 tons). So, at the sake of going 0-for 2, I am projecting November shipments at 100,000 tons, 30,000 tons more than last November.
California Walnut Shipments Recap (000)
Month (Oct) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 89,106 96,706 100,806 104,148 8.7%
Shelled (lbs.) 37,269 61,594 37,750 54,417 -11.7%
Total Tons 86,712 118,029 93,794 114,622 -2.9%
Market:
After some of the most active walnut industry bookings that I have ever experienced, the market now seems to be cooling off. China and Turkey are still booking, but not at previous rates. As an example, approximately 9 million pounds of inshell were shipped to China/Hong Kong at the end of October last year. This year, the shipments are at 27.5 million pound and I expect the November numbers will be similar.
As expected, Inshell Hartley’s to Europe have dropped off, but shelled bookings continue to be active. The Japan and Korea markets continue to book as well as the US domestic markets.
The market is still in a flux as most packers are still off the market. The major reason is that the record bookings in the past 6 weeks have extended their inventory position; and many must hold until they see their final tonnage from the growers.
It is my belief some packers will be coming back on the market shortly, but others will most likely remain off because of booking commitments and limited available inventories.
Limited trades have the Light Halves & Piece market in the $3.95 range and the Combo Halves and Pieces at $3.55 plus. Inshell Jumbo Hartley’s are trading around the $1.60 levels with Jumbo/Larges at $1.55.
Inshell Chandler Jumbo/Large are on both sides of $1.85 with Howard’s and Tulare’s 5-10 cents less.
I believe that the industry will ship more than 60 percent of the crop by the end of December and will have the entire 2010 crop committed shortly there after.
Please let me know if you have any questions or comments.
My well wishes for the up coming holidays and have a Happy Thanksgiving weekend.
Pete
Monday, November 29, 2010
Weekly Cashews Update
NOV 27, 2010
There was limited activity in Cashew market in Week 47 but it continued to be firm – prices moved up few cents on some grades. Price range was 4.05 to 4.15 for W240, 3.70 to 3.75 for W320, around 3.60 for W450 & SW320, around 3.45 for SW360.
RCN market also continued to be firm. Quantity auctioned in Tanzania this week was lower and price was 2-3% higher. It is still not clear when exports from Mozambique will start. There is no improvement in situation in Brazil – arrivals are slow and price is high. Total crop figure will not be clear till Feb/Mar – current estimates range from 150 to 200,000mt.
In last month or so, most of the business has been for shipments upto Mar/Apr and some business has been done for 2nd quarter as well (at the same prices). There is reasonable buying interest for 2nd & 3rd quarter few cents below the 1st quarter prices but processors are not willing to discount because there is uncertainty about the 2011 crops and RCN prices.
Overall, USA & Europe contracting for next year shipments from origin (and delivery to retailers) has been much lower than normal. If the demand decline is not as big as feared, buyers will need to buy early in the year for 2nd quarter requirements and this will keep the prices in the current range. If the importers and retailers are able to manage with current cover for few weeks longer, the reduced buying in first quarter will result in a softer market which will have an impact on RCN prices too.
There is no change in the fundamental factors – supply will be tight until the Northern crops start in Mar/Apr. Even if the crops are normal (or good), opening prices are likely to be high due to an empty pipeline – RCN and kernels. In the meantime, if kernel prices come down from the current levels due to less buying activity in the first quarter processors (and RCN traders) might delay their buying and wait for prices to ease when arrivals pick up. But if the crop prospects are not good, they may have to review strategy even if kernel activity in the first quarter is slow.
To sum up, we can expect a firm market for next few weeks. Softening MAY happen in Feb but the decline will be small unless there is a big drop in kernel activity. A BIG drop in prices is possible only if ALL the 2011 crops are good – shortage in 2011 on top of a short 2010 will mean a very firm market all through 2011.
As there are too many uncertainties on both sides, all stakeholders will have to navigate carefully till Mar/Apr - by that time, demand trends will be clearer and we will have fair idea of 2011 crop prospects.
Would appreciate your comments on the current situation + views (and forecast) of trends + any other information / news for better understanding of prospects for coming months.
Regards,
Pankaj N. Sampat
There was limited activity in Cashew market in Week 47 but it continued to be firm – prices moved up few cents on some grades. Price range was 4.05 to 4.15 for W240, 3.70 to 3.75 for W320, around 3.60 for W450 & SW320, around 3.45 for SW360.
RCN market also continued to be firm. Quantity auctioned in Tanzania this week was lower and price was 2-3% higher. It is still not clear when exports from Mozambique will start. There is no improvement in situation in Brazil – arrivals are slow and price is high. Total crop figure will not be clear till Feb/Mar – current estimates range from 150 to 200,000mt.
In last month or so, most of the business has been for shipments upto Mar/Apr and some business has been done for 2nd quarter as well (at the same prices). There is reasonable buying interest for 2nd & 3rd quarter few cents below the 1st quarter prices but processors are not willing to discount because there is uncertainty about the 2011 crops and RCN prices.
Overall, USA & Europe contracting for next year shipments from origin (and delivery to retailers) has been much lower than normal. If the demand decline is not as big as feared, buyers will need to buy early in the year for 2nd quarter requirements and this will keep the prices in the current range. If the importers and retailers are able to manage with current cover for few weeks longer, the reduced buying in first quarter will result in a softer market which will have an impact on RCN prices too.
There is no change in the fundamental factors – supply will be tight until the Northern crops start in Mar/Apr. Even if the crops are normal (or good), opening prices are likely to be high due to an empty pipeline – RCN and kernels. In the meantime, if kernel prices come down from the current levels due to less buying activity in the first quarter processors (and RCN traders) might delay their buying and wait for prices to ease when arrivals pick up. But if the crop prospects are not good, they may have to review strategy even if kernel activity in the first quarter is slow.
To sum up, we can expect a firm market for next few weeks. Softening MAY happen in Feb but the decline will be small unless there is a big drop in kernel activity. A BIG drop in prices is possible only if ALL the 2011 crops are good – shortage in 2011 on top of a short 2010 will mean a very firm market all through 2011.
As there are too many uncertainties on both sides, all stakeholders will have to navigate carefully till Mar/Apr - by that time, demand trends will be clearer and we will have fair idea of 2011 crop prospects.
Would appreciate your comments on the current situation + views (and forecast) of trends + any other information / news for better understanding of prospects for coming months.
Regards,
Pankaj N. Sampat
Sunday, November 21, 2010
Weekly Cashews Update
NOV 20, 2010
The Cashew Market is leaving uncharted waters…. and seems to be entering the Bermuda triangle – nobody knows where market will end up.
Although market was relatively quiet in week 46, prices moved up few cents again on limited volume. Business was done for W240 from 3.95 to 4.05, W320 from 3.70 to 3.75, W450 around 3.50, SW320 around 3.50, SW360 around 3.35 FOB. In 3 weeks, prices have gone up by 15%. Prices for broken grades in Indian domestic market moved up sharply – in some cases, higher than the price for wholes !!
RCN prices also continued to climb up – Tanzania RCN has been traded around US$ 1800. There are reports of Mozambique RCN trading around 1300 C&F but since shipments are not likely before Jan, this cannot be taken as indication of the price at which shipments will actually take place (there is even talk of a ban or a delay in commencement of exports). Spot parcels of West African RCN (low quality) in India & Vietnam are being picked up at very high prices. Wage increases in Kerala / Tamil Nadu will add about 10 cents per lb to the proessing costs.
Short crop in Indonesia and a slow, short crop in Brazil coupled with low inventories in importing countries will result in a tight kernel supply position in first quarter 2011. And this will mean that pattern of limited buying for nearbys will continue.
Buyers seem to be reluctant to buy volume as they feel that the high pries will have big impact on usage in 2011. They are content to buy smaller volumes as & when needed – this means there is steady demand at all times. Extent of impact may not be as much as feared (especially because prices of all nuts are high). This could mean that some might be caught without enough product to meet the base demand (higher prices may mean lesser promotions or special offers).
Although it is difficult to say whether prices will continue to move up in coming weeks, we can certainly expect a firm market until there is some indication of the 2011 crop prospects. If 2011 crops are normal, market may soften after April (timing and extent of softness will depend on kernel buying in first quarter). If there is any problem with 2011 crops (on top of the 2010 shortage), prices could continue to move up in 2011 unless there is a big drop in usage.
It is extremely difficult to read the market and judge (or even guess) which way this precariously placed market will move. The steady rise over last 15-18 months with buying support at all levels leads one to believe that the trend will continue until supply improves. Historical highs make one fear that even a small development (fundamental or external) might result in a dramatic change in sentiment and provide the trigger for a trend change.
Would appreciate your comments on market situation + views on trend / prospects + any other information / news
Regards,
Pankaj N. Sampat
The Cashew Market is leaving uncharted waters…. and seems to be entering the Bermuda triangle – nobody knows where market will end up.
Although market was relatively quiet in week 46, prices moved up few cents again on limited volume. Business was done for W240 from 3.95 to 4.05, W320 from 3.70 to 3.75, W450 around 3.50, SW320 around 3.50, SW360 around 3.35 FOB. In 3 weeks, prices have gone up by 15%. Prices for broken grades in Indian domestic market moved up sharply – in some cases, higher than the price for wholes !!
RCN prices also continued to climb up – Tanzania RCN has been traded around US$ 1800. There are reports of Mozambique RCN trading around 1300 C&F but since shipments are not likely before Jan, this cannot be taken as indication of the price at which shipments will actually take place (there is even talk of a ban or a delay in commencement of exports). Spot parcels of West African RCN (low quality) in India & Vietnam are being picked up at very high prices. Wage increases in Kerala / Tamil Nadu will add about 10 cents per lb to the proessing costs.
Short crop in Indonesia and a slow, short crop in Brazil coupled with low inventories in importing countries will result in a tight kernel supply position in first quarter 2011. And this will mean that pattern of limited buying for nearbys will continue.
Buyers seem to be reluctant to buy volume as they feel that the high pries will have big impact on usage in 2011. They are content to buy smaller volumes as & when needed – this means there is steady demand at all times. Extent of impact may not be as much as feared (especially because prices of all nuts are high). This could mean that some might be caught without enough product to meet the base demand (higher prices may mean lesser promotions or special offers).
Although it is difficult to say whether prices will continue to move up in coming weeks, we can certainly expect a firm market until there is some indication of the 2011 crop prospects. If 2011 crops are normal, market may soften after April (timing and extent of softness will depend on kernel buying in first quarter). If there is any problem with 2011 crops (on top of the 2010 shortage), prices could continue to move up in 2011 unless there is a big drop in usage.
It is extremely difficult to read the market and judge (or even guess) which way this precariously placed market will move. The steady rise over last 15-18 months with buying support at all levels leads one to believe that the trend will continue until supply improves. Historical highs make one fear that even a small development (fundamental or external) might result in a dramatic change in sentiment and provide the trigger for a trend change.
Would appreciate your comments on market situation + views on trend / prospects + any other information / news
Regards,
Pankaj N. Sampat
Monday, November 15, 2010
Weekly Cashews Update
NOV 13, 2010
Cashew market continued to climb up in Week 45. Business was done for W240 around 3.95, W320 around 3.65, W450 around 3.45 FOB with reports of some sales few cents higher as well. Volume traded was not large but there was good demand from all markets. Although most of the sales were for Nov-Jan shipments, there was reasonable interest for shipments upto Mar/Apr as well. Prices for broken grades in Indian domestic market jumped up by over 10% in the last ten days.
The RCN prices in Tanzania also moved up and they continue to be ahead of kernel parity (even with the rising kernel prices). The high RCN prices seem unsustainable but since there is limited RCN availability, it does not seem that prices will ease unless there is a withdrawal or reduction in kernel buying activity.
For the last three weeks, people have been expecting that there will be resistance to the higher prices and that buying interest would cool down. On the contrary, prices have been moving up every week by 2-3% and there is continued buying interest despite the rising prices. There has been short covering against delays plus some fresh buying to cover future requirements. Some market or the other has always been buying. This continued buying (volumes are not large as offers are limited) coupled with higher RCN prices due to limited availability + concerns about Brazil crop are providing support to the firm trend & rising prices. Brazil processors are unlikely to offer any significant quantities until their crop situation is clear – right now, it looks very bad but things could change in the next couple of months.
The current high price – about 50% higher than the average of last 18 months and the highest ever seen - should certainly have some impact on usage (especially the promotions). Extent of impact is uncertain (there seems to be very little impact in Asia). Lower kernel availability will also reduce the adverse impact of higher prices on total demand. Rawmaterial availability will be tight until second quarter 2011 – it will ease after May/Jun PROVIDED the North crops are good. Till then, reduction in demand will not have much impact on kernel prices which can soften only if RCN prices come down with good arrivals. Of course there should be a “pain” threshold for cashew prices (like everything else) but it is impossible to judge when that will be reached.
For the time being, attention is focussed on the supply side and everything points to a continued firmness – so far each wave has shown higher top. Until the supply situation changes or there is a clear indication of a large decline in demand, this trend is not likely to change. When the trend changes, the speed of price change will depend on the extent of the change in supply or demand (and equally important, the sentiment of all stakeholders).
To sum up, it is very difficult to predict which way things will move. People are working with short term positions and this makes things very dangerous – a small development can trigger a significant move.
In these difficult times, what are your comments on market situation and your views on prospects / trends ? Any special news or information ?
Regards,
Pankaj N. Sampat
Cashew market continued to climb up in Week 45. Business was done for W240 around 3.95, W320 around 3.65, W450 around 3.45 FOB with reports of some sales few cents higher as well. Volume traded was not large but there was good demand from all markets. Although most of the sales were for Nov-Jan shipments, there was reasonable interest for shipments upto Mar/Apr as well. Prices for broken grades in Indian domestic market jumped up by over 10% in the last ten days.
The RCN prices in Tanzania also moved up and they continue to be ahead of kernel parity (even with the rising kernel prices). The high RCN prices seem unsustainable but since there is limited RCN availability, it does not seem that prices will ease unless there is a withdrawal or reduction in kernel buying activity.
For the last three weeks, people have been expecting that there will be resistance to the higher prices and that buying interest would cool down. On the contrary, prices have been moving up every week by 2-3% and there is continued buying interest despite the rising prices. There has been short covering against delays plus some fresh buying to cover future requirements. Some market or the other has always been buying. This continued buying (volumes are not large as offers are limited) coupled with higher RCN prices due to limited availability + concerns about Brazil crop are providing support to the firm trend & rising prices. Brazil processors are unlikely to offer any significant quantities until their crop situation is clear – right now, it looks very bad but things could change in the next couple of months.
The current high price – about 50% higher than the average of last 18 months and the highest ever seen - should certainly have some impact on usage (especially the promotions). Extent of impact is uncertain (there seems to be very little impact in Asia). Lower kernel availability will also reduce the adverse impact of higher prices on total demand. Rawmaterial availability will be tight until second quarter 2011 – it will ease after May/Jun PROVIDED the North crops are good. Till then, reduction in demand will not have much impact on kernel prices which can soften only if RCN prices come down with good arrivals. Of course there should be a “pain” threshold for cashew prices (like everything else) but it is impossible to judge when that will be reached.
For the time being, attention is focussed on the supply side and everything points to a continued firmness – so far each wave has shown higher top. Until the supply situation changes or there is a clear indication of a large decline in demand, this trend is not likely to change. When the trend changes, the speed of price change will depend on the extent of the change in supply or demand (and equally important, the sentiment of all stakeholders).
To sum up, it is very difficult to predict which way things will move. People are working with short term positions and this makes things very dangerous – a small development can trigger a significant move.
In these difficult times, what are your comments on market situation and your views on prospects / trends ? Any special news or information ?
Regards,
Pankaj N. Sampat
Monday, November 08, 2010
Weekly Cashews update
NOV 6, 2010
After a quiet beginning, week 44 saw further increase in cashew prices from middle of the week (in the last 2 weeks, prices have moved up by 6-7%). Business was done for W240 from 3.85 to 3.95, W320 from 3.45 to 3.55, W450 from 3.25 to 3.35 FOB. Most of the business was with USA but other markets also bought some quantities. Bulk of the sales were for Nov-Jan shipments but some business was done upto Mar/Apr. In the domestic market, prices for brokens have started moving up again.
Tanzania RCN prices moved up further to approx US$ 1625-1650 in this week’s auction. Indonesia RCN prices were steady around US$ 1500-1525 but yields are lower. Initial indications for Mozambique RCN are over US$ 1200 but shipments will not be possible before Jan. Brazil situation is unclear and worrying – arrivals are slow, RCN prices are high and processing is much lower than normal. If there is improvement, this will be known only in Jan.
For the next 2-3 months, we can expect market to remain firm because of Chinese demand for their New Year + Indian demand for the winter/marriage season + high RCN prices + limited replacement availability.
Traditionally, processing in India & Vietnam is low in first quarter – in 2011, this will be further reduced by lower availability of RCN from the 2010 crops. So a drop in demand in first quarter may not have large impact on the prices immediately. If the drop in demand extends into the second quarter and is accompanied by normal weather and good prospects for 2011 crop, we might see softer market and lower prices from the second quarter.
Asian markets are showing growth in usage despite the increase in prices (as Asian markets are a spot market, price movements are reflected in retail prices much faster than in the organized markets in the West). The impact of the higher prices in USA & EU is a big question mark. One view is that there could be a 20-25% decline in usage. If this is true (and this will be known only in second quarter), there might be a big drop in prices when the 2011 crops start and this will change sentiment of the market. Another view is that since the prices of other nuts are also high, decline may not be that much. If the decline is in single digits, we feel that there will not be any big decline in prices UNLESS the 2011 crops are very good. And if the trend of short period buying continues in first few months of 2011, the prices will remain at current levels and this will support RCN prices when 2011 crops start.
The long term outlook depends not only on the impact of higher prices on demand but also the state of the 2011 crops. Until there is some definite and clear indication on these two important factors, market will continue to be delicately poised reinforcing the need for caution. The pattern of buying (frequency and volume) + general food (especially nuts) price trends + financial market trends are other factors to be watched closely.
To sum up, we expect continued firmness for the short term (3 months) + volatility in the medium term (3-6 months) + uncertainty about the long term (6-12 months).
Would appreciate your comments on market situation, views on trend and prospects for coming weeks / month and any other news or information
Regards,
Pankaj N. Sampat
After a quiet beginning, week 44 saw further increase in cashew prices from middle of the week (in the last 2 weeks, prices have moved up by 6-7%). Business was done for W240 from 3.85 to 3.95, W320 from 3.45 to 3.55, W450 from 3.25 to 3.35 FOB. Most of the business was with USA but other markets also bought some quantities. Bulk of the sales were for Nov-Jan shipments but some business was done upto Mar/Apr. In the domestic market, prices for brokens have started moving up again.
Tanzania RCN prices moved up further to approx US$ 1625-1650 in this week’s auction. Indonesia RCN prices were steady around US$ 1500-1525 but yields are lower. Initial indications for Mozambique RCN are over US$ 1200 but shipments will not be possible before Jan. Brazil situation is unclear and worrying – arrivals are slow, RCN prices are high and processing is much lower than normal. If there is improvement, this will be known only in Jan.
For the next 2-3 months, we can expect market to remain firm because of Chinese demand for their New Year + Indian demand for the winter/marriage season + high RCN prices + limited replacement availability.
Traditionally, processing in India & Vietnam is low in first quarter – in 2011, this will be further reduced by lower availability of RCN from the 2010 crops. So a drop in demand in first quarter may not have large impact on the prices immediately. If the drop in demand extends into the second quarter and is accompanied by normal weather and good prospects for 2011 crop, we might see softer market and lower prices from the second quarter.
Asian markets are showing growth in usage despite the increase in prices (as Asian markets are a spot market, price movements are reflected in retail prices much faster than in the organized markets in the West). The impact of the higher prices in USA & EU is a big question mark. One view is that there could be a 20-25% decline in usage. If this is true (and this will be known only in second quarter), there might be a big drop in prices when the 2011 crops start and this will change sentiment of the market. Another view is that since the prices of other nuts are also high, decline may not be that much. If the decline is in single digits, we feel that there will not be any big decline in prices UNLESS the 2011 crops are very good. And if the trend of short period buying continues in first few months of 2011, the prices will remain at current levels and this will support RCN prices when 2011 crops start.
The long term outlook depends not only on the impact of higher prices on demand but also the state of the 2011 crops. Until there is some definite and clear indication on these two important factors, market will continue to be delicately poised reinforcing the need for caution. The pattern of buying (frequency and volume) + general food (especially nuts) price trends + financial market trends are other factors to be watched closely.
To sum up, we expect continued firmness for the short term (3 months) + volatility in the medium term (3-6 months) + uncertainty about the long term (6-12 months).
Would appreciate your comments on market situation, views on trend and prospects for coming weeks / month and any other news or information
Regards,
Pankaj N. Sampat
Monday, November 01, 2010
WALNUT MARKET/CROP REPORT
R.L. “Pete” Turner October 30, 2010
WALNUT MARKET/CROP REPORT
CROP:
Due to this years late harvest, it is believed the packers to date have only received about 75 percent of the crop. Of the 25 percent yet to be received, about 80 percent are Chandlers.
Most of the industry feels this year’s almost perfect growing season will produce a “bumper” crop, but not the 510,000 tons projected by The National Agriculture Statistical Service (NASS). Of the major varieties received so far, the Harley and Tulare tonnage appears to be about the same as last year, with the Serr’s and Howards ahead of last years numbers. The big question mark is the Chandlers as we still have about 20 percent of the tonnage yet to come in. Never-the-less, I don’t believe this will be enough to take the crop to NASS’s projection of 510,000 tons.
Most of the industry now believe the crop will be much closer to the Handlers “subjective” estimate of 473,000 tons rather than NASS’s 510,000 tons. Right now, and for a lack of a better number, I’m going with 480,000 tons.
As projected, the crop was at least 15 days later than normal which put a lot of pressure on the growers and hullers to handle the peak harvest period. In spite of this, they seem to have met the challenge as the packers received record tonnage during the first two weeks of October. However, we received up to 2 inches of rain earlier this week and another storm just passed through. This should not have an effect on the quality as the rains are expected to end today making it possible for the growers to get back in the field on Monday.
Also, as projected, the nut size on all varieties was much smaller than normal. This caused most packers to go to a lower percentage of larger sizes for their inshell packs. Thus, most of the Chandlers, Howards and Tulare’s were sold as 70/30 percent Jumbo/Large and the Hartley’s at 80/20 percentage Jumbo/Large. The size issue could cause some problems with some of the early bookings that called for Jumbo size packs.
The good news is the quality of this year’s crop has been excellent with very low defects. The meat yields were higher than normal (even the Harleys) and the percentage of light kernels were also higher than normal.
As expected, September numbers were down with shipments of only 20,828 tons (inshell equivalent) compared to 31,000 tons last year. The low shipments were caused from the late crop and lower than normal carry-over tonnage from the 2009 crop. However, I believe the October shipping numbers will be well over last year’s record of 87,000 tons.
California Walnut Shipments Recap (000)
Month (Sept) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 7,601 7,601 3,342 3,342 -56.0%
Shelled (lbs.) 24,325 24,325 16,667 16,667 -31.5%
Total Tons
(In-shell eqv.) 31,317 31,317 20,828 20,828 -33.5%
Market:
The industries opening prices apparently stimulated the market as prices started strengthen right from the start. Because of the late harvest, Europe jumped on the early inshell varieties as well as the Harleys in order to make vessel dates.
In addition, China started booking inshell shelling stock (Chandler/Howards/Tulare’s) and anything else that fell off the trees. Turkey followed with heavy bookings on the same shelling varieties. As of this date, trades into both of these markets continue to remain strong, thus creating a temporary inventory shortage, causing most packers to pull off the market. In addition, the packers are concerned about over booking, especially with the crop coming up shorter than expected.
This has created some confusion and disappointment in the domestic market as many buyers felt that pricing would weaken because of the record 510,000 crop. To date, this has not happen and in my opinion, the market will continue to strengthen. I base this assumption on the crop being smaller than the forecast and the extra strong demand coming from the China market.
In addition, two of the largest packers recently opened in Japan at $3.45 for Light Halves and Pieces; and at least one of them withdrew from the market last week. Also, the availability of Hartley’s seem to be getting tight as buyers are now jumping on the smaller sizes in order to meet their commitments.
I am always reluctant to put out current pricing, but here it is anyway:
Light Halves & Pieces $3.45 (opening $2.75)
Jumbo/Large Chandler In-shell $1.70 (opening $1.35)
Jumbo Hartley’s $1.48 (opening $1.25)
Please let me know if you have any questions.
WALNUT MARKET/CROP REPORT
CROP:
Due to this years late harvest, it is believed the packers to date have only received about 75 percent of the crop. Of the 25 percent yet to be received, about 80 percent are Chandlers.
Most of the industry feels this year’s almost perfect growing season will produce a “bumper” crop, but not the 510,000 tons projected by The National Agriculture Statistical Service (NASS). Of the major varieties received so far, the Harley and Tulare tonnage appears to be about the same as last year, with the Serr’s and Howards ahead of last years numbers. The big question mark is the Chandlers as we still have about 20 percent of the tonnage yet to come in. Never-the-less, I don’t believe this will be enough to take the crop to NASS’s projection of 510,000 tons.
Most of the industry now believe the crop will be much closer to the Handlers “subjective” estimate of 473,000 tons rather than NASS’s 510,000 tons. Right now, and for a lack of a better number, I’m going with 480,000 tons.
As projected, the crop was at least 15 days later than normal which put a lot of pressure on the growers and hullers to handle the peak harvest period. In spite of this, they seem to have met the challenge as the packers received record tonnage during the first two weeks of October. However, we received up to 2 inches of rain earlier this week and another storm just passed through. This should not have an effect on the quality as the rains are expected to end today making it possible for the growers to get back in the field on Monday.
Also, as projected, the nut size on all varieties was much smaller than normal. This caused most packers to go to a lower percentage of larger sizes for their inshell packs. Thus, most of the Chandlers, Howards and Tulare’s were sold as 70/30 percent Jumbo/Large and the Hartley’s at 80/20 percentage Jumbo/Large. The size issue could cause some problems with some of the early bookings that called for Jumbo size packs.
The good news is the quality of this year’s crop has been excellent with very low defects. The meat yields were higher than normal (even the Harleys) and the percentage of light kernels were also higher than normal.
As expected, September numbers were down with shipments of only 20,828 tons (inshell equivalent) compared to 31,000 tons last year. The low shipments were caused from the late crop and lower than normal carry-over tonnage from the 2009 crop. However, I believe the October shipping numbers will be well over last year’s record of 87,000 tons.
California Walnut Shipments Recap (000)
Month (Sept) 2009/10 Year to Date 2010/11 Year to Date Percent
In-shell (lbs.) 7,601 7,601 3,342 3,342 -56.0%
Shelled (lbs.) 24,325 24,325 16,667 16,667 -31.5%
Total Tons
(In-shell eqv.) 31,317 31,317 20,828 20,828 -33.5%
Market:
The industries opening prices apparently stimulated the market as prices started strengthen right from the start. Because of the late harvest, Europe jumped on the early inshell varieties as well as the Harleys in order to make vessel dates.
In addition, China started booking inshell shelling stock (Chandler/Howards/Tulare’s) and anything else that fell off the trees. Turkey followed with heavy bookings on the same shelling varieties. As of this date, trades into both of these markets continue to remain strong, thus creating a temporary inventory shortage, causing most packers to pull off the market. In addition, the packers are concerned about over booking, especially with the crop coming up shorter than expected.
This has created some confusion and disappointment in the domestic market as many buyers felt that pricing would weaken because of the record 510,000 crop. To date, this has not happen and in my opinion, the market will continue to strengthen. I base this assumption on the crop being smaller than the forecast and the extra strong demand coming from the China market.
In addition, two of the largest packers recently opened in Japan at $3.45 for Light Halves and Pieces; and at least one of them withdrew from the market last week. Also, the availability of Hartley’s seem to be getting tight as buyers are now jumping on the smaller sizes in order to meet their commitments.
I am always reluctant to put out current pricing, but here it is anyway:
Light Halves & Pieces $3.45 (opening $2.75)
Jumbo/Large Chandler In-shell $1.70 (opening $1.35)
Jumbo Hartley’s $1.48 (opening $1.25)
Please let me know if you have any questions.
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