Dear Valued Customer,

Please find below our market report, it has been a whirlwind few weeks with commodity prices coming down aggressively.

Cashews.

Market is very quiet, prices are holding firm, probably because China (say it in a Donald trump voice) is picking up the slack. We are being told the Vietnam kernel crop is expected earlier which we be good for pricing, but that wont effect till the 2^nd QTR, we strong advice to book to cover 1^st QTR, if you don’t, you run the risk of not having product to cover.

Almonds.

Big growers are saying prices will rebound, not to the $5 dollar range but will go up, that’s what they are saying, currently the market is stagnated, there is rain, snow packs have formed and it’s a good crop, along with very little buyers confidence and a lot of mistrust, unless the growers invent a new use for almonds we don’t see pricing rebounding higher, we are super aggressively priced on Almonds and you should take advantage.

Pecans.

Contrary to everything else Pecans have rebounded and looks to only continue its meteoric rise. China is back in the market, along with next year being an off year so farmers are storing a lot for the carry over, even though this was meant to be the ON year because of crop damage its not been amazing, we are priced accordingly.

Finally, at this juncture we at Atlantix would like to wish you and your loved ones a very happy holidays and a happy and joyous new year, we truly appreciate our business relationship and look forward to only growing stronger together with you in the coming years.

Summer!

Suffice to say its summer, and it feels like summer and the market still appears to be in holiday mood. Neither buyers nor sellers are doing too much at the moment. Most important development to look out for is China, and the last move by the government to devalue the currency to stem the import market and keep their currency in house. Now how that will affect the market is one to definitely watch out for.

Cashew Market

We have started to see more activity by US buyers in the last few days. In spite of the relative quietness, prices are staying put and showing little sign of weakness especially from the better packers out there. Now why is this so? well, the overriding factor I think is that “cashews is still the best value nut” and Raw seed prices remaining very firm, and since RCN crop is nearly done and is getting bought by packers in Vietnam and domestic market processors in India they have no need to lower pricing.

So in a nutshell (get it) we feel due to these two factors that prices will not come down over the next 6 months and if anything could well firm up in September when buyers return to the market for Pre-Christmas stock and tenders and Europe comes back from holiday with heavy bookings, basically everyone gets of the beach and decides to start working again.

Almond Market

The almond market has been very quiet, no real heavy bookings and most growers loath to even offer far out. This one is a real head scratcher. For 10 years the Almond Board has done a wonderful job, the first five years was spent expounding the amazing health benefits of the Almond, and then expounding on the terrible drought for the last five, I wonder what tack they will take on now. Prices are at a record high along with it being the driest months in history in California.

The fact that despite the lack of sizeable trade for almost 2 months prices have only lost 1 to max 2% of their highest levels ever achieved, it shows how resilient the suppliers are and how much they like being rich.

Sellers are waiting to see the result of shelling the receipts from the harvest. The first results reported are disappointing, which is normal (the first orchards to be shaken are the most stressed and these are non pareils). Will China come in heavy again? With the high price, and the low bang for their buck (yen) along with rumours of a monster El Nino abound as well all make this an interesting one to watch.

                                                                                                                                                                                                                               

We feel there is a distinct lack of buyers confidence right now. Supermarket sales on straight almond snacks have dropped by 15%-20% saying that, the slack has been picked up by the almond flour and almond butter business. Could this year be the breaking point? So many different deciding factors here it’s a very tough one to call.

For now short term though we don’t think one will see any price decrease, and maybe its wishful thinking that even later in the year we will, but here’s hoping.

Pecan Market

Again we know it’s going to be an excellent crop in most regions, question is what does China do this year, last year they were buyer, broker and trader, will they act in a more restrained manner and only buy what they need for new crop? It remains to be seen, most of the crop is gone and new crop will be post the holidays, expect pricing to drop then but not till then.

Brazil Nuts

The floods earlier in the year has meant the availability is short again but not as bad as the 2014 crop which was affected by the worst floods ever, and shippers won't have any carryover to last through until the new crop....This year, demand has remained constant and has kept prices firm but stable, we think with the lack of carryover and the short shipments no one would predict any decline in this market until new crop. 

Update

Suffice to say the market is very strange and I will explain why.

We have seen a price drop over the last few days and a reluctance of offers from top quality packers but offers from medium/small packers. We have also seen some good offers out of India which we haven’t seen for a while.

Let’s start with RCN (Raw Cashew Kernel) prices have spiked aggressively with worrying news of contract defaults and rejecting of poor shipments. The high price has the smaller and midsized packers “spooked” and in an effort to garner funds have been offering out product for cheaper/losses in order to garner interest and capital in an otherwise quiet time for purchasing to cover RCN costs.

                Vietnam processing has become significantly more sophisticated and reliant of machines (Insert Terminator joke here) which has created an increase in product quantity by around 15%. Better shelling means more complete cashews, less pieces but should drive the market even further down in price.

                Why the sudden offers from India? China which has been the traditional big buyer of India cashews has slowed down due to the Chinese Government clamping down hard on importers smuggling cashews across the border (Jackie Chan is slated to make this into a movie) without paying the duties and are holding up imports. So the factories that were reliant on business as normal are now being forced to look for other avenues to sell their product to.

So to summarize, high price of seed, high production in Vietnam, big trouble in China has all contributed to the market moving down. With the ease in pricing it would seem logical to come in and cover needs and if no big movement happens then it’s possible that pricing will drop a bit again. Even the pieces market has taken a little dip but nothing too exciting. We feel that June/July the market will/may reach the bottom and when the season starts again and demand from China in Aug/Sept will restart the price will rebound to offset the price of RCN. Remember all the packers will tell you, “Cashews are still the best priced nuts” and they are right.

Conclusion: Time to book out now.

Almonds: June 11^th is the actual report so will do a separate report when we have all the facts.

Pecans: Trading high, demand has slowed but most of the crop is sold and come the season it should only climb more.

Pistachio: A few weeks I reported on problems with China with US pistachios and it seems it’s also that same border issue, We are being told by the growers that it’s not been a good crop and that in the short term could cause a spike in pricing, but in the long term the growers must be worried that once the deal is signed with Iran and the sanctions lifted they are going to have real competition with Iranian pistachios and that could be a cause of a real price drop which must get them nervous (though not as nervous as Israel I would assume) 

Market Update

Please find enclosed this week’s market report 

Cashew’s

This week the packers waited in anticipation for buyers to come in heavy, while buyers played the waiting game hopping for a drop in pricing. In the end there was slight bump in prices due to some activity. While it wasn’t as heavy as expected pricing did hold and in some cases strengthened. The late crop is the most important factor here when it comes to where the market will eventually go. When the market will be flush with product then we could see a decrease but that is still a way away. We strongly advise to book QTR needs.

Pieces as per all my previous reports is trading very high and since we still don’t know how much of the crop will end up in pieces, we don’t anticipate this going down. We are experiencing delays in shipments on these grades.

Almonds

The subjective estimate was released today at 1.85 billion pounds, which was expected.  Current demand seems to be just as strong and the May shipment report numbers should back that up.  If the May shipment report is as high as April then price will strengthen in a big way, since the growers need a carryover till new crop, so they need a lull of shipment of 9%+ which is unlikely.

With the continued uncertainty of next year’s crop, growers will most likely look to sell their remaining supply of 2014 crop at these record prices or higher, however they will still be hesitant to sell any 2015 crop.

We continue to see reports regarding the drought and this is going to be the major factor in the future. If the weather remains dry and demand stays where it is now, we must expect prices to continue to move up.  If we get some rain and global demand is sluggish at these record high prices (which I don’t see), we could see the price come down.  This leaves buyers in a very risky situation as these scenarios will not fully play out at least until October just as first shipments of 2015 crop start arriving around the world.

Pecans

The Cold Storage numbers are most telling with very little crop left over, so expect this commodity to just keep climbing in price.

Brazil Nuts

There are very few offers coming out of Bolivia, still flooding in areas of the jungle, and due to this not a lot of seed coming out for the processors and most shippers have withdrawn offers, due to this we believe it would be prudent to book now while the price is here because we won’t know how much more inventory will eventually hit the market.

Updates!

Cashews

Obviously new crop is in, the Tet holiday is winding down and shipments will start to flow, but currently most importers are short on product, anticipating a price reduction to the market most have waited and hence find themselves in this predicament. We strongly advise that you book 1^st QTR needs, we don’t think prices will start to move down till April sometime and that means shipments arriving in May, also something to be aware of, with the trouble on the West Coast ports, more and more shipments are being diverted to the East Coast and that could also be a factor in delaying arrival. We also don’t think we will see a price drop in the pieces market due to the advancement of cracking machinery reducing the amount of breakage to 15% down from almost 33%.

Almonds

Even though we hear about damage to the trees due to the 5^th year of the drought and the lack of El Nino again, we think the farmers know they have to tread a very careful line. Prices are at a record high and while domestic sales have been robust, sales to Europe have slowed, now this could still be the issues with the port or a more systemic problem. With that in mind the Almond farmers have been acting very responsibly and don’t want the pricing to keep going up because they feel the market is comfortable at this level. We also await the bloom report and this month shipment report, post that we could see this market go either way and a bad subjective report would spike prices even beyond the control of the farmers.

Pecans

This commodity has had an all-time record high movement in pricing and all we said from our past reports have come to be, now we are seeing a quieter time for pecans, not a lull per say but pecans meteoric price increase has slowed, saying that if China now post its new year’s comes in heavy again then the price is likely to continue to spike higher. Also to be remembered, it hasn’t been a very large crop. 

Nuts!

We have seen much the same as was reported last week, but some specific things to note.

Cashews

Tanzanian Seed is completely sold out and most packers are awaiting RCN from the Ivory Coast but there has been delays with early shipments. India is not eager to sell since the domestic market is robust and they are getting better offers which means they do not need to ship oversees. Prime Minister Modi has now been in power for 60 days and the changes have been remarkable to say the least. The fixed wages bill is part of Modi intense effort to create a viable strong middle class and it seems to working, India in a huge market and must start to be viewed in the same light as China when it comes to its domestic buying power.

Vietnam is much of the same with limited offers from quality packers, all the small packers are still of the market but the demand is starting to pick up and prices have strengthened again this week. In terms of its own Vietnamese crop this will only become available in March after the Tet holidays, so unlikely we will see an abundance of product till them, in light of that, the price we are seeing is likely to hold or go higher in the short term, where it goes when new crop comes remains to be seen, it’s 50/50 either way, but highly unlikely we will see any drastic drop. We are advising our clients again this week to book 2^nd QTR needs, it is wise to cover needs because the risk of a dramatic price drop is low as is a dramatic price increase.

Almonds

The bloom report is a few weeks away with weather once again playing a huge factor. Jan had record high temperatures but weather reports indicate some wet weather ahead which is so desperately needed. Also the addition of recent snow packs will help with the reservoirs. In terms of the political rulings, the supreme court threw out the case to overturn the ruling in terms of the Delta Smelt Fish which would have benefited almond growers, of course they are going to try again and will keep you posted.  

In terms of the next shipment report, we are being told there is now a renewed demand from Europe even with the weak euro and they have come back to the market to purchase against contracts. They have seen a silver lining, that even with a declining euro they need to bring in product and while mostly they brought in Standard 5 due to the growing US almond butter business they are getting there contracts of Standard substituted with NPS.

The continued strong US currency is a bit of a problem but put that against the huge growth of imports to India (+66%) it’s not going to make any real dent in pricing and we will continue to see these high prices for quiet sometime. The bloom report will be a critical factor going forward.

Pecans

We continue to see a price move up on Halves due to past Chinese buying. We don’t believe the pieces market to move much higher though. 

New Year!

It’s been an eventful week with some significant changes. Most important thing to note right from the onset is the high dollar which is becoming a factor, not huge yet but if the dollar continues to further strengthen against the Euro, Canadian $ and other currencies it could start to really effect oversees trade. In terms of where the dollar can go, it all depend on if the fed will raise interest rates (which they don’t seem to want to do) but till then we are seeing a slight slowdown in exports to Europe and other parts of the world.

                                                                                                                                                                                                                                           

Almonds

In light of that, I would like to address the Almond market first. The December shipment is most telling. Had the export numbers been down by -20% plus then it would have been something, but the drop of -11% means that prices will stay at these high level for quite a while with a possible further upward trend. We are already paying the price for next year drought and based on little to no rainfall so far in Jan and the wet month of December being negated by the warm weather which meant no snow packs were formed. In terms of the Dec shipment report most glaring is the drop in exports to Europe (again due to a weak Euro) but the slack has been picked up by massive buying by India and China (ultimately Europe is going to need to cover its contracts and will move quicker now seeing the $ vs EURO movement).

This has not effected exports to China who’s currency shadows the US dollar and India which has really stabilized the rupee. While India massive consumption remains a mystery, in terms for the packers back home they know they need to stem the exports because they will little to no carryover at this rate. The one way to do this is by raising prices. This is not a traders market, rather it’s an opportunist dream, pick up a deal here and there and sell it on. The drought seems to be stretching into its 5^th years and anything less than 2 Billion plus bloom report will not bode well for ongoing pricing. While these high prices is having an effect on end consumer purchasing, it is being offset against by exports and the need to slow down sales for next year’s carry over.

Cashews

Pricing has edged up over the last couple of days, even though the market continues to be very quiet. India has slowed it production, this is due to a government fixed wage increase for workers, this has caused many factories to close down and other factories are simply not producing because of the high price of RCN out of Africa.  

In terms of Vietnam, new crop is due late February but because of the Tet holidays that month, we will not see any shipments going out in till March with most factories being closed. There is a classic disconnect here between Packers not chasing this market and buyers not purchasing at these levels. Ultimately demand will have to kick in and buying will happen. With the beginning of new crop the price could go up, so short term it’s wise to purchase now for 2^nd QTR needs, long term it’s harder to see where this market is going.

Cashew Pieces are still really the only grade moving with these high prices due to lack of product vs demand.

Pecans

As we said last week, even with the massive crop, the demand from China is immense we are seeing some huge volumes being shipped of JR Mammoth Halves, on that product the growers are nearly out, so demand will shift to large halves & pieces which will cause a further price increase. This is simply a demand factor with a trickle down effecting other sizes. We expect to see this commodity continue to go up in price.

Walnuts

While we have been saying for a while that pricing is dropping, we are seeing a price disparity between Light and combo varieties, the availability for LHP is lower than combo, so expect combo prices to continue to drop while LHP with less of an aggressive price drop

Pine Nuts

The price on Pine Nuts continue climbing on a daily basis, it’s hard to tell if this is due to the upcoming Chinese New Year or if this just this just the real market price vs demand, time will tell….