Report

c/o Mr. Henry Stimler

Summer is in full force and as you expect things are relatively quiet or for use of a better term not as robust. Saying that, we have been active and will continue to be very active in the right spaces and patient with other products. This is though what we gleam from our surroundings and what we advise you our clients to be aware of.

Almond Market

The almond market is quiet, prices SPOT are kind of stable but the trading is thin, really not an abundance of crop or offers. As we advised, no one is in any rush to go and book massive contracts at these high prices of new crop, saying that they growers probably expected this summer lull and are not panicking yet and holding strong.

Harvest has started, or is about to start, in most of the counties. Where it already took place we are receiving reports the quality is disappointing. Normally the first orchards to be shaken are the most stressed (ie water issues) and farmers want to shake the kernels down the trees sooner than later. Every year we receive reports that the quality of the first shakes is not great so it’s really nothing to worry about. We need to wait a few more weeks before getting some solid feedback from the shellers and then we can properly advise.

On the demand side, increasingly more buyers are going on holiday. Particularly the European ones who are awaiting cheaper prices to come, they believe it will come down for the following reasons.

Slowing demand (or so they claim) at the current prices after a year at historically high levels

Good crop available soon from Spain (Spanish growers are reducing their asking prices weekly which will make them more attractive)

The biggest crop ever in California (according to the NASS objective estimates at 2.1 billion pounds, so they feel that should impact the price

Growers/Packers are holding on to their prices because of the draught and they bet the demand is going to stay strong, regardless the price. This is exactly the same situation as two weeks ago, both sides holding strong, let’s wait and see who breaks first, (I hope it’s the growers)

Cashew Market

We keep saying this is a sideways market, and we think we may see another small price correction. This is mainly because previous pricing was a little too high. Now that Kernel prices are coming down, the growers can make profit, so we should see a small market adjustment because Vietnam will want to move product especially now that they can make margins.  We feel in coming 1-2 months, production in Vietnam will remain same or reduce just a bit. Export will still be high in Aug, Sep because of old stocks and contracts.

The Chinese have finally made some moves, and  have been active for lower grades, and they have begun to buy for Mid-Autumn Festival. They are mostly buying DW and the lower grades like DW2, SW2, TPW, (the rubbish)

WW240: market not very active. Price is stable or down a bit 5 cents. Sellers do not want to sell lower unless they have to sell

WW320: supply seems to be more than demand (although there is always demand for WW320).

WW450: not much to offer.

DW: good quality DW, market isn’t going to go down because it is a product in demand by China

WS: price stable or up 5 cent/kg

LP: still very hot, a lot of inquiry. Price up 5-10 cents/kg, and keeps climbing.

Walnuts Market:

Very little movement and getting out of our positions because current price is high and new crop is going to bring it down and we know this already from what farmers are telling us, if you are sitting on big positions its rather risky, buy only spot right now and forward contract once new crop comes out.

Conclusion

Its summer and things are quiet, but if you are going to be unprepared come September and what will be a mad scramble in preparation for the  holiday season. You do not want to be caught with your pants down, scrambling to bring in stock that is now high and being stuck with nothing for your customers.

While its quiet now it’s not going to last, so do not be lulled into a slumber by the heat, be alert and cover your positions and keep a weathered eye on Almonds, Walnuts, Pecans etc because you don’t want to be panicking because you thought this calm will last, it will not.

Please find enclosed our revised spreadsheet, we have lowered pricing on a few items, we would also advise you to jump on the Bulgarian sunflower seeds and the Shine Skin AA Papitus. And if you have any dates left over, freeze them for next year, they like fine wine get better with age.

Market Update

It’s been two weeks since my last market report and for good reason, there is no point in a report unless we have some fresh news and market prognosis, which we do.

Cashew Market:

As always, let me start with cashews. Nothing really has budged since the last report (dealing with China and Vietnam etc) while it hasn’t really come down, no one is running to produce offers either. Indian packers still remain higher because they can and Vietnam is not seeing a great amount of demand. We are still experiencing record shipments but most savvy buyers have booked their forward contracts over the last few weeks (at our advice) through till December. Now is still a good time to forward book and very little downside risk at these current prices.

LPs: so finally we are getting offers on LPs but we are hesitant to spring into action since the shipments we have already booked keep getting delayed, so even though we finally are getting offers it’s still very shaky as to if these containers will finally leave port and steam towards us.  

Brazilian: Probably due to World Cup fever we have seen close to no offers from Brazil, but after the 7-1 trouncing and back to back loses to Germany & Netherlands (first time in 80 years) maybe now a tearful nation will brush themselves of and get back to work and we will be back in business but we doubt it. (side note: last time Brazil lost the World Cup at home in 1950 the country went into a deep depression) saying that new crop is coming in October and then will should be flush with offers.

Almond Market:

And now on to the main course. It’s been a funny last few weeks and we are deeply involved and intune speaking constantly trying to gleam every bit of information to advise you our clients on what we think is the best way to move forward. Right now it’s a game of minds, think The Wild Wild West who blinks first. Sellers are being incredibly bullish and even with a record crop think that they will prevail with going out with these high prices on new crop (compared to last year’s opening prices) Now the reason they believe is based on a boatload of impending doom of their situation. Farmers are sprouting the mantra of “high future water cost” another drought (even with the predicted El Nino) and a multitude of other reasons to fuel their/your/our fears. They can also just hold out and store crop even though at some point they will need the space so they will need to ship.

As buyers and traders we have a somewhat different perspective. Top of the list is the lack of European buying activity, Spain has had a better crop then last year (even though it could have been a bumper crop) and they can buy from there and save on time and shipping, we are not seeing forward bookings out of Europe (beauty of being a subsidiary of UK company Barrow Lane and Ballard Est 1887) With this mindset we believe that price will have to at some point adjust at a four % ratio up or down (sideways market) which we can take advantage of at that later point, but that’s not for a while.

Based on that our analysis its rather simple. Not much up/down risk to book smartly through till January and then hold. Seller confidence could start to wane and pricing can come down post Jan and no more shipping reports. (in light of new crop, we have adjusted our current crop pricing and bringing it lower as reflected in our price list) based on this analysis you are not exposing yourself to a tremendous amount of risk and that is always the best way to trade and buy.

Pecan Market:

As per my last report, based on the fact that there is very little product available right now in the market, but not us, we are sitting pretty with a good amount of stock, so we would like you to forward book the next two months at the current pricing (this week only) with the market getting stronger it is very prudent to book and hold at this price. Demand prior to the holidays is going to be huge and no new crop till post that will leave those who don’t make any moves in a very precarious situation and buying at a very high price. Right now the market is already going up and we are pretty confident it’s going to go up to $6;00 so don’t dally if it’s an item you need and use.

Other:

Its Ramadan and we have Medjool dates packed in 11lb boxes with 180 on a pallet. Chinese Pine nuts market is also moving on an upward scale while Brazil nuts have moved lower. We again have organic Almonds and organic Cashews and White Quinoa in stock. We also have 2011 Macadamia crop that we are looking to move, its vacumm packed and good quality and we entrertain bids in the high $4:00 range.

Kind regards

Henry Stimler