Tuesday, July 29, 2014

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.

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