Monday, July 19, 2010

Weekly cashews update

JULY 17, 2010
Cashew market was quiet in week 28 but undertone is firm. There is some resistance to higher levels being quoted from India (W240 from 3.25 to 3.30, W320 around 3.10, W450 around 2.95 FOB) but processors do not seem to be willing to sell at lower levels (there is reasonable buying interest few cents below offered levels and stray business was done). Some processors in Vietnam are making occassional sales few cents below India. Brazil sold few cents higher than India – they may not have much to offer. Activity in Indian domestic market is picking up – prices for brokens and large wholes have moved up.
RCN prices moved up a bit with trades for IVC between 900 and 950 C&F and GB around 1150 C&F. There is some concern about the crops in Brazil and Indonesia but we feel that a realistic picture of prospects will be available only in Sep. There is talk of higher export duty on Tanzania RCN.
In last few weeks, there has been a fair amount of business with all markets for Jul-Oct shipments and some business has been done for forwards as well. This seems to indicate current levels are comfortable. BUT, neither the processors or buyers seem to be interested to go out on the limb and take large positions. Processors do not have any replacement RCN available – so, they are reluctant to sell large volume at one price and be left with little to sell if prices move up. Buyers do want to build large positions as there is uncertainty about demand & usage in the main markets. Prices for some other nuts have softened recently and this is adding to buyers reluctance.
For the next 2-3 months, market movement will depend on kernel buying interest as there is no fresh RCN to be purchased. There is nothing on the horizon to alter prospects for market trend – regular activity will keep the market steady and if there is any need for large buying, we will see a spike in prices. We might see a dip in prices if there are several quiet weeks but large or sustained decline seems to be unlikely in 2010. Peak for 2010 is still to be seen.
It is very difficult to judge trends for 2011 because there are so many uncertainties & variables (fragile financial & economic situation in developed economies is adding to the uncertainty). Overall, it certainly seems that a big decline in cashew price range is possible only if there is a sharp & large decline in usage in both USA & EU which seems unlikely or if there is a big increase in supply which could happen in SH of 2011 (at the earliest).
Would appreciate your comments on current situation, views and forecast of trend & prospects and any other news + information.
Pankaj N. Sampat

Tuesday, July 13, 2010

R.L. “Pete” Turner July 12, 2010



The June shipments of 22,810 tons (inshell equivalent) finally hit my forecast and if my next two months forecast of 52,000 tons are close, the industry will carry in less than 20,000 tons into the 2010 crop. This means that even if the crop is 30,000 tons higher than last year, the total available inventory will be several tons less.

California Walnut Shipments Recap (000)

Month (June) 2008/09 Year to Date 2009/10 Year to Date Percent

Inshell (lbs.) 3,688 171,540 1,433 204,381 19.4%

Shelled (lbs.) 26,332 234,311 19,265 280,945 19.9%

Total Tons
(Inshell eqv.) 30,781 343,255 22,810 424,375 23.6%

As you can see, year to date shipments have reached 424,375 tons vs. 343,255 tons at this time last year, up 24%. The percentage will decrease as I expect forward shipments (July/August) to be less than last years.

At this date, the 2010 walnut crop looks very good, not only in tonnage and nut size, but in quality as well. During the past few weeks, I have toured (and interviewed growers) in five growing regions (Stanislaus, Linden, Sacramento, Yuba City and Chico) and the census is, a large crop, good nut sizes (except Howards) and excellent quality. Surveying of these areas has reinforced the outlook on the crop size, especially with the tonnage conditions observed in the Chico area. However, every grower cautioned that we still have two months to go and weather could have a negative impact on all of the above.

The Packers will come out with their “subjective” estimate on July 27th, and based on history, the “subjective” estimate usually comes close to the “objective” crop estimate issued by the National Agriculture Statistics Service (NASS) the first week of September.

As reported earlier, most of California’s row and tree crop harvest have been later than normal; and most walnut growers believe the start of the harvest will be 7 to 10 days late.

Inshell shipments to the Middle East (Turkey, U.A.E, Egypt, and Israel etc.) have reached 60.7 million pounds 55 percent more than last year to date. The same can be said for China/Hong Kong with 43 million pounds this year vs. 27 million last year.

The big question is…will they be buyers this year? If they are, and my opinion they will be, we could see a heavy early demand not only for Hartley’s, Chandler and Howards, but for early varieties as well. Reports of some early sales activity helps support this position.


Inshell business has been very quite due to available inventories and to my knowledge, very few new sales have taken place in the past few months.

As expected, Shelled prices have weakened somewhat with Chandlers Light Halves and Pieces in the $3.85 range, with Regular Light Halves and Pieces trading at 3.65. Combinations Light Halves and Pieces seem to be firm at $3.40 with Medium and Small material slightly less than the Halves and Pieces prices. The market on Light Halves is being reported in the $4.60 range.

Please let me know if you have any questions or comments.


Photos taken June 29, 2010 Chico area.

Tuesday, July 06, 2010

Weekly Cashews Update

JULY 3, 2010
There has been a fair amount of activity in the Cashew Market in weeks 25 & 26. But hardly any movement in prices. Business was done for W240 around 3.15, W320 around 2.95, W450 around 2.80 FOB. Prices in domestic market moved up a bit (more for the brokens).
RCN market was also steady with business being done for afloat parcels of IVC around 900 and Guinea Bissau around 1125 C&F India. There are offers at lower prices from origin for limited quantities of lower yield RCN but processors are not showing interest since better quality afloat parcels are available at reasonable prices.
There is nothing new to say about the fundamentals. RCN supply for 2010 is more or less known within a 5 percent range (timely conversion to kernels is likely to be an issue). On the demand side, trend of regular buying for nearbys is likely to continue (due to uncertainty of demand trends + general economic situation, no large forward positions are being taken).
We do not have much information on actual offtake trends and demand forecasts for cashews (and nuts in general) in the main importing countries + would appreciate any information you can provide.
As discussed earlier, peak consumption period in most markets will start in a few weeks. If offtake is normal (or even little bit lower), prices will continue to move in current range (downside is limited as supply is lower than last year). If spot / nearby offtake is more than expected, we could see prices moving up in Aug-Oct which would mean upward pressure on RCN prices in the last quarter.
Normally, Southern crop RCN is traded higher than Northern crop because of better quality & much smaller quantity. This year there is some uncertainty about next year contracting which normally happens in Aug-Oct. If the contracting is for lower volume / period and if the spot / nearby demand in that period is also slow, processors will be in less of a hurry to buy Southern crops. This may reduce the premium for the Southern crop (although there are some processors – especially those who cater to Indian market – who rush to buy early arrivals).
Overall, most people expect market to move in the current range for next few months with some possibility of a price increase in Aug-Oct (depending on factors mentioned above). There is very little chance of a big decline in prices this year. The only bearish factor is the economic situation – if things worsen in next few months, it will adversely impact the demand forecast + market sentiment + ability / willingness to take large positions.
Please advise your comments on market situation, views on prospects for coming weeks / months and any other news / information.
Regards,Pankaj N. Sampat

Pistachio growers keep close watch

Pistachio growers keep close watch
Jul 2, 2010 8:24 AM, By Cary Blake, Farm Press Editorial Staff
It is too early to predict the exact size of the 2010 California pistachio crop. California grower Brian Blackwell predicts an average crop; perhaps in the 350-million-plus pound range.
California grower Brian Blackwell believes the above-average rainfall and cool temperatures this spring are a double-edged sword for the 2010 Western pistachio crop.

JIM GRAHAM, Cochise Groves, LLC, predicts a 4,000-pound per acre 2010 pistachio crop on his 160-acre ranch in Cochise, Ariz. Graham hopes for good grower prices since pistachio stocks are low and worldwide demand remains strong.
�We don�t know how many (shell) blanks we�ll have due to the lousy weather during bloom time,� Blackwell said. �We had plenty of winter chill hours, but the problem was the unusual high rain and wind events. We don�t know yet if the crop was adversely affected by the weather. Kernel development should begin in early July.�
Blackwell grows pistachios in Kern and Tulare counties in the southern San Joaquin Valley. He owns and operates his own pistachio farm, Blackwell Farms. Blackwell also wears the hat of president of the Blackwell Farming Co., where he manages pistachio orchards for other landowners.
Blackwell is chairman of the Western Pistachio Association.
It is too early to predict the exact size of the 2010 California pistachio crop. Yet Blackwell predicts an average crop; perhaps in the 350-million-plus pound range.
The 2009 crop initially looked promising � in the 400-million pound range � until spring weather tempered yields.
Kern County received more rain this spring than the last five to six years, Blackwell says. About 7 inches fell in the Bakersfield area. The area has averaged 3.5 to 4 inches in the spring annually over the last five years.
�We received almost double the rain, but it was the timing of the rain which created problems,� Blackwell said. �The rain started in April and fell about every 10 days. In some fields up north I have already applied three fungicide sprays (as of mid-June); that is virtually unheard of in our area. The rains pounded us through the bloom period.�
Pistachios are pollinated by pollen carried in the wind, not by bees.
The extra moisture pushed Blackwell into pest control mode.
�There is a lot of feed out there for insects, gophers and squirrels,� Blackwell said. �We are spending a tremendous amount of time trying to control these in our orchard. We are getting ready to put on an insecticide for stink bugs,� Blackwell said. �We�ll apply some foliar nutrients at the same time.�
Despite the heavy rains, Blackwell purchased water for the pistachio crop on the open market.
�You do what you have to do to make sure you�re covered,� Blackwell said. �I am covered, but not because of the allocation through the California State Water Project. I had to buy expensive water to put on my crops.�
Bob Beede, University of California Cooperative Extension (UCCE) farm advisor, Kings County, says the overall southern San Joaquin Valley pistachio crop load varies tremendously by orchard.
�Mature orchards which bore heavily in 2009 are understandably light in 2010,� Beede said. �Young orchards unexpectedly low in crop load last year have an abundant crop this year in most cases.�
Pest control advisers and growers are reporting misshaped shells in young trees, Beede says, possibly caused by a temporary deficiency of calcium during the cool weather and its impact on the translocation of macronutrients.
Beede suggests the 2010 California pistachio crop could fall in the 350-375 million pound range. The 350-million pound threshold is considered average, but the number is a moving target due to increased pistachio plantings.
�The new average could easily become 375 million pounds once all the young trees begin to bear,� Beede said. �We anticipate young trees will make a significant contribution to the 2010 pistachio crop, even with the relatively light crop in many mature orchards due to alternate bearing.�
About 95 percent of all pistachios are the Kerman variety.
Beede suggests that growers keep a sharp eye out for late-season plant bugs. Conversations with crop consultants on pest management timing are critical. Measuring nitrogen and potassium level contents relative to the crop load is important.
Beede recommends combining fertilizer applications and irrigations to top off the trees to optimize them for kernel fill beginning late June.
Arizona pistachio grower Jim Graham is breathing easier following several late frost scares in early May. Early morning temperatures on the orchard exterior plunged to 26 F. The critical cold temperature for pistachios is 29 F on Graham�s farm located at 4,300 feet above sea level. Wind machines spared any crop loss.
Graham and wife Ruth own and operate Cochise Groves, LLC, a 160-acre pistachio ranch in Cochise located in the Sulphur Springs Valley in Cochise County.
Pistachios are an alternate-bearing crop. 2010 will be an off-year for most Western pistachio growers yet Graham�s trees are in the on-year cycle. Weather events can switch the internal production clock in trees; even on an orchard-by-orchard basis.
�I�m pretty happy with how my crop looks right now,� Graham said. �It is a good crop, but not my largest crop ever. I would be delighted to get a 4,000-pound per acre yield.�
His largest crop was 5,000-pounds-plus/acre in some orchards in 2002, the year following a hard freeze wiped out the entire crop.
Graham�s goal is to achieve a 4,000-pound crop in on-years and 2,000 pounds in the off-year. He is utilizing pruning and fertilization toward that goal.
The upbeat Graham is excited by potential grower crop prices. Worldwide pistachio stocks are down while demand is strong. �I�d like to see the price for premium split inshell No. 1 grade pistachios approach the $2/pound range,� Graham said.
U.S. pistachios are grown in California, Arizona and New Mexico. California growers produce about 98 percent of the total crop.
The Western Pistachio Association represents growers across the tri-state region. Executive Director Richard Matoian, Fresno, Calif., is hearing a mixed bag of crop projections from members ranging from a good crop to a little light.
Matoian said, �As positive as the rain was this spring, growers like rain, but not this time of the year (spring).�
The rain and cool spells could delay harvest this fall. Motoian said the crop was running seven to 10 days behind (mid-June).
�Growers would rather have an early maturing crop than a late maturing crop,� Matoian said. �A later crop has more potential for insect damage. Fall rains can reduce crop quality.�
Pistachio acreage in the three-state pistachio belt is about 210,000 acres, including about 125,000 bearing acres and about 85,000 non-bearing acres.
A big push in pistachio tree plantings from 2004-2008 included up to about 25,000 acres annually.
Plantings have slowed to the 5,000 acre/year range. Matoian believes lower plantings are tied to available water uncertainties in some areas plus some market uncertainty.
Pistachio exports five years ago totaled about 35 percent of total shipments. Exports today, Matoian says, account for about 65 percent of total shipments.
Craig Kallsen, UCCE farm advisor, Kern County, says the number of heat units this summer will ultimately determine whether the pistachio harvest will be on time or late this fall.