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in areas of the jungle, and due to this not a lot of seed coming out for the processors and most shippers have withdrawn offers, due to this we believe it would be prudent to book now while the price is here because we won’t know how much more inventory will eventually hit the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

Post Thanksgiving

Dear Ladies and Gentlemen,

I hope everyone had a wonderful thanksgiving and holiday weekend.

Cashews
So the pattern continues, prices remain sideways and are at a good low level. Something to note, price on seed have gone up and we have been told that processors have brought around 80,000MT (about 40,000MT left) of Tanzanian seed, this says to me they are expecting some heavy bookings which haven’t materialized yet, it’s to be noted that China has a very late Lunar new year, and while they have started to buy, it has not be huge volume due to them having time to buy. Quality packers are trying to push out higher prices but no one is really biting, it is rather quiet on the buy side, with Europe having to deal with a very strong dollar. At these levels we would advise that you cover 25% of your needs and watch, if it’s the lowest then it’s a good price and if this is highest it’s not bad either. One word of caution, cashew nuts is still the best value tree nuts around, as the price the Almonds keep rising we will see a bigger retail move over, this is why splits and pieces are so firm on price because it’s become an alternative in mixes. So again we said last week, the market is soft and it’s a good time to book a bit and cover. Going forward we need to wary of China coming in heavy and prices moving up.

Almonds

Very interesting market right now, the market in a way is finding itself and up till two weeks there was some nerves and a couple of smaller packers got the jitters and went out with lower offers but now they too have steadied the bows and have held steady  the big growers have stayed very firm most are not even offering. On a good note, rain has started to fall and they are expecting heavy storms, this should fill up the rivers which have been depleted of water, unfortunately this will have little to no impact at all on today’s crop or the soil, after 4 years of drought it’s going to need much more than a few days of rain, also early word on El Nino looks like it’s not going to hit the valleys and Modesto (will keep watch) We also await the upcoming shipment report but by the attitude of the growers and their reluctance to offer we think it’s going to be a good one. The Spanish farmers are taking advantage of these high prices as well and Europe while trying hard to resist have no choice but to cover. We advise to be hand to mouth in terms of buying and that’s probably the best way to trade at the moment.

Pecans

We are being told some very interesting things but don’t jump into action just yet, while it’s a bumper crop some rumors are coming out that the quality isn’t great (lots of brown spots) and price is going to move up due to this. We will keep an eye on it.  

-H. Stimler

Vietnam

Cashew Market.

As we said last week the market has softened and levels are very low. We feel that this is the floor and won’t go any lower, the price of Tanzanian RCN, is trading for $1,400 per metric ton and there isn’t  a lot of seed on the market so price could probably go higher. The other seed won’t be available till 1^st QTR which means earliest around March. Most factories are not producing at all and those that are, are producing small quantities since they don’t want to sell at these low prices.

Traditionally when pricing hits this low level interest goes up and the price moves up along with that interest. We strongly advise to book both SPOT and 1^st QTR needs now. Our pricing reflects these low levels and we have also come down on roasted products by $0.10. Please inquire for forward contracting pricing.

Almond Market

As per our extensive Almond report last week, we have seen some cheaper offers from small packers & traders, and have adjusted accordingly. Large packers haven’t budged on pricing and are still holding firm and the domestic market demand is very high. El Nino predictions have be upped and California got some rain last week but nothing significant at all. Although rain will affect the short term market it will only really make a proper impact 2 years down the line due to the tree damage.

Small snippet of info, we have in terms of the European market which comes from the trading desk at Barrow Lane and Ballard is that many traders have large contracts and went short, now that Spain is out they will have to start buying US product and that could impact pricing and push it higher, it’s something we will keep an eye on.

Walnuts.

The pipeline has still not burst and that is why the pricing which we think should come down is still holding strong.

Pistachio.

Market is somewhat sideways. The very large Iranian crop means very little buying from China and the strong harvest of 526 million means that price could fall. We will have a better idea when grading is done.

Please find enclosed pictures of our CEO’s recent trip to Vietnam.

Almond Shipment Report

We didn’t send out a report yesterday due to the Almond shipment report. After strong and in depth analysis we have some strong conclusions.

October shipments were released yesterday and the results are a gaggle of different signals:

-          Shipments were “only” 11% off last year’s record breaking numbers (204 million vs 228)

-          Commitments were “only” 13% below last year’s (458 vs 528)

-          Crop receipts 1.516 billion vs 1.385 last year (but harvest started earlier)

-          USA market up 8%, western Europe +2% (UK -9%, Germany +21%, Spain -18%, Italy +2%, Holland +42%, France -2%), China -44%, India +16%, Japan -26%, S Korea -14%, Turkey -20%, UAE -23%

Most Important

-          New sales for the month 276 million – This is the strongest sales month on record despite the historically highest prices ever.

Some important things to take note of. The Spanish Almond price drop is not related nor will it affect US crop pricing. Why did Spanish Almonds price drop?,  simply the European farmers are not “fat cats” and want to move product at this time. The crop has been OK and they are not in the same financial position as the California growers. They are not looking to increase yields to the same rate, rather happy with the current pricing and the desire to shift product and bring in some much needed cash. (typical Euros)

China has dropped significantly. Granted, but look at what has happened in India. Prime Minister Modi is intent on creating a new middle class, he has removed the red tape for importers (which was formally controlled by a few prominent families) this has led to a huge increase of almond imports 66%. Well either they have flooded the market or very cleverly have imported mostly unshelled almonds to forward sell, they can shell cheaply in India and can ship easier into the Chinese market (less import taxes). Even with the fear that these “rookie” importers are flooding the market, it will  have no real impact or adverse effect since they can’t ship it back stateside anyway. (Try getting past the FDA)

In terms of rain. Hardly any rain fell in October and so far in November and hardly any in the forecasts.

El Nino (wet winter) probabilities revised down to 55% from 65%.

The 2014 crop is now expected to be in between 1.90 to 1.96 billion down from the objective estimate of 2.1 billion hence growers/packers expect shipments to be down 10% on average every month in order to have a feasible carry-over for next year. I also feel that the growers have now given up hope of rain and are comfortable at these prices even without it (covering the cost of bringing in water). They are not really expecting it, this is evident in the recent signing to bring “drip irrigation” to the great state of California.

We think that we can expect prices to remain unchanged till the end of the year at least. For January onwards we are in the hands of mother nature (= rain or lack thereof)

So in conclusion:  The drop of 10% is not something to cause concern or to expect a price drop. We would need to see everything in the favor of the buyers for any real price drop, a tremendous amount of rain and a bumper forward crop. Neither of these seem on the horizon but am not GD (even if my mother disagrees :-) so impossible to predict the future but that’s our gut and conclusion based on what the reports & market research indicates.

Saying that some unsophisticated traders could read the report wrong and panic sell so some cheaper pricing will be available and we are seeing offers like that, but not from the actual large growers. They have gone out high and the domestic market have just accepted it and more, as evident by the 8% increase and the record breaking sales month. The demand for Almonds by the common man is strong (well done Almond Board)

I hope this is helpful, we shall be sending out a new price list tomorrow and can now offer the following Pistachios 18/20 R/S. 

Movements

Dear Gentlemen,

Some good movement on the market this last week in terms of Cashews and Almonds.

Cashews.

The cashew market has definitely softened caused by some significant factors. The price of Tanzanian seed has moved down and the left over seed has also come down which has pushed cashew prices down. China isn’t purchasing any 320/240 so price has fallen, while 450’s is still holding firm because that item is still being purchased by China.

This market can move easily either way. If China comes in with heavy buying for the Luna new year that will push the prices up, that could also be the reason why they are not purchasing now in anticipation of the cheaper prices and hoping it will drop more and then they will come in heavy, this more than any factor will determine the price going forward. We have also seen a softening in the LP price due to the drop in the price to 240’s and 320’s so this has pushed down the LP price.

We would advise to book SPOT, you need to cover your QTR needs in case of very heavy buying which looks most likely.

Almonds.

This month’s shipping report is very important to determining where this market is going, it’s been the third week since offers have been flowing, and the market is finally breathing. Based on the report we can get a better picture but most people in the market seem very convinced that pricing isn’t going to come down. The thought process is that the almond farmers have made good money for the past few years and combined with the lack of rainfall are in no massive rush to move product. Small factor in terms of rainfall, the state of California signed an agreement with the Israeli government to implement drip irrigation which would negate the problem of drought, this week take a few years to get done but it shows the mindset of the state, that they are not “hoping’ for rainfall they are going to prosper even without it.

Pecans.

Small movement on the pecan market, the price discrepancy between Halves and Pieces and Mammoth halves is getting smaller, they are looking to close that gap because there are not so many pieces on the market because of the sophistication with the shelling. While it’s a good crop the farmers are intent on holding high prices and are happy to store product in order to achieve that.

While the Mexican farmers need funds so will try and undercut pricing to move product. The difference in this product is the lack on conformity between Mexican pecan growers, Texans and Georgia so harder to tell what the farmers will do overall.

Walnuts.

We expected the price of walnuts to drop, it hasn’t yet due to the late crop and the pipeline issue, but its starting to move and there should be more availability in the next few weeks. We have taken a position on Walnuts LHP and combo Halves and pieces.

Pine Nuts.

We are offering great pricing on 650 ct

Update

The last few weeks have been stop and start for us due to the Jewish Holidays but it’s all done now and back to normal.

Some good changes, some bad, please find attached our reviewed price list and a brief market overview.

Cashews.

The market has softened in price, especially with product out of India. This nice drop in price is due to the slowdown of Indian export, according to the Indian CEPCI last year this time exports numbers were at 61,866, while this year its 55,471, when you have a 10% drop you know you have to do something and that’s exactly what has happened, this will of course have a knock on effect to Vietnam pricing which will have to adjust.

The lack of consumption by China which India didn’t take advantage of has left them in a position where they have to move product even while complaining about the high price of seed. It’s a good time to book, saying that the PIECES market is still strong and that due to the demand still being high with a short supply.

Almonds.

We have seen a tiny adjustment and offers are trickling out. Asia has been serviced with their requirements and now the focus will be squarely on the domestic market and growers are starting to ship. Rain is still a HUGE factor and while most growers live in fear of a continued drought, they do need to move inventory and can’t just do nothing as much they want to sit and stockpile. While I wouldn’t call this a market softening its more “we have wiggle room”. We are strongly advising to cover your QTR needs because if no rain should fall its highly likely that they will take themselves of the market again, but with a contract they will have to supply product no matter what.

Pecans.

Very interesting market, we are seeing cheaper offers for product from growers and we have adjusted our price accordingly. Some growers are offering cheaper in-shell product much the same as last year. Pecans must be seen as “the likeable but not needed for the party cousin in the nuts family” and while the Almonds farmers have confidence the Pecans guys don’t, hence the movement of price is more erratic and it can be a risky commodity to take large positions. The product is not as saturated or imbedded and pricing is not as stable. Now is the time to keep trading and moving in and out as per your needs. It would be risky to forward book at a price to far out because of this inherent mentality which we have seen in the past.

Pistachio.
Still no real offers, and hearing even less. Rumors of a large amount of blanks are still just rumors but the growers coming in and out TWICE would lend credence that it could very well be the case. Iran’s Pistachio is not going to be a factor. We feel this product is going to go up in price over the course of the year. 

Update

Last week was a short week with the Jewish holiday of Rosh Hashanah, Happy New Year and I apologize for the lack of report and pricing. Even with the lack of the report there has been plenty of action and the lead up to the season has seen a flurry of business.

Cashews

The upward price continues to climb and we believe it will do so till January. Demand is very high and it’s looking like a bumper season in terms of demand. India and Vietnam besides for all the bad decisions they have made over the course of this year know that this is the time to strike and are taking advantage of this demand by asking high prices and getting it. We don’t see much changing and with the return of heavy buying from China price could stay but most likely to continue to rise. It’s not going down, even Jan forward contract are high but will that hold remains to be seen. LP is a freak of nature, price is still very yet demand hasn’t abated.  

Almonds

It’s been a mess of indecision, first growers offered then they pulled of the market and made us wait, made me feel like being at a high school prom all over again. Well it seems the wait may finally be over and now that they have finished the crop and know the numbers (which looks to be more at the 1,75BL number) they will reopen the books next week and we should be business as usual. Offers we are seeing right now are from traders that booked heavily last crop or sprang into action in the short window of offers and are riding the wave and making good money, in this case the risk was worth the reward. Next week will give us clarity and we should be able to offer out forward booking. Saying that don’t expect any huge price change, the drought continues to be a huge issue and very worrying.

Pistachios

Crop news isn’t great isn’t terrible, it’s been a decent crop with some amount of blanks, we know as well that there has been a very low carry over from last year’s crop. We have been pushed of week after week but we are told that next week finally pricing will be offered. Saying that one large grower did dip his toe into the water and offered out for one day at decent pricing then closed shop the day after. We feel that they are going to want to go out where last year’s crop left off and we thing think its going to fly as the market has been robust at the $5.20 - $5.40 level, saying that and we should see some decent pricing very soon and have proper knowledge.

Pecans

New crop is irrelevant as its going to miss the season and the growers know this but they also know that we know it’s been an excellent crop year. So current spot pricing is high and they are holding firm because they want to protect old crop pricing before announcing new crop price. The also want to keep the price high using a futile attempt that all other nuts has gone up in pricing why can’t Pecans be like Almonds (because all nuts are not created equal) , it’s not going to happen. For now we advise to buy what is needed spot and cover needs. (same thing we have said last three months)

Walnuts

Another good crop but as per last report very little offers due the pipeline, since there is virtually no old crop on the market the growers have to get export crop out before they can service domestic properly but we hope we are going to see a nice price reduction.

"Copy and Paste" week

c/o Henry Stimler

Compiling this week’s report could be as easy as copy and paste from last week’s report but being a consummate professional I will attempt to write pretty much the same thing as last time with a hope of coming of not too repetitive.

Saying that, it is very much the same. Prices have only continued to go up on certain items and the rest we do not have clarity to give any real updates. Here goes.

Cashews.

Prices continue to go up as we have seen for the last few weeks. The rise has been in $0.05 to $0.15 increments. This has to do with the high price of seed. Saying that we don’t feel this is going to turn into a runaway commodity. Till Jan pricing is expected to go up and then post that the price should settle down, much like last year. The cause for the price increase as per last week is that the Sheller’s can no longer mix cheap seed with current seed since all has been used. We should see post Jan the price of new seed come down which will bring pricing down.

Pieces Market is a completely different fish. As we have kept saying for weeks, now that the ability of the Sheller’s to get unbroken cashews means less and less pieces yet the demand for pieces is still very much there. So when you have an actual physical shortage expect prices to keep going up.

Almonds.

More of the same, as I said last week, the shipment report will not be a good indicator and even though it’s a tad lower than last year it didn’t make a spot of difference. Prices continue to be very high. The growers are beyond nervous, on the one hand with the reports of crop damage rumors of now upcoming needed rainfall for next year’s crop legitimize these high prices BUT on the other hand if the almond prices just continue to go up the blow back is going to be enormous, reminiscent of 20 years ago when Peanuts got to high and were replaced by Almonds (I was 16 at the time and it was traumatic). Large conglomerates will just abandon Almonds in its products and the damage would take years to rectify. Growers are sensitive to this and are trying to act in a responsible manner. This along with the tremendous volatility we are seeing makes it very hard to call but we can only speculate that post Jan we will see a price correction.

Pecans.

Prices are staying where they are. Market is high and dry, very little product floating around, the harvest will miss the season since its scheduled for November 15^th meaning no deliveries till December and the bottleneck pipeline will take time to filter down but as we said prior post Jan we shall see a good price correction.

Pistachios.

Not enough info a this current time.

Walnuts.

Same, waiting on the market to stabilize 

and the "season" begins

c/o Henry Stimler

1^st week of September has been one of furious action along with furious inaction. Let me explain.

Cashews.

As per last week’s report the market has strengthened across the board and we see it in all current offers on cashews. We have seen another jump by around 10 cents on a product that has consistently been going up over the weeks, we think this price will now stick for a while. There is a number of factors contributing to this price increase. First and foremost is the high price of RCN out of Africa. This high price has caused many Vietnam producers desperate to move product have been selling at a loss, this in turn meant the banks starting pulling credit. Packers now needed to be profitable hence the significantly price increase.

Packers have also slowed down with purchasing RCN to force a price correction. Currently due to these 2 opposing factor there isn't an abundance of stock on the market and since its already the season they know that the demand coming now isn't so high so they can afford this ploy.

We feel that this price is going to stay around for now, and it looks unlikely that we will return to the day of old any time soon, a good indicator is the forward contract pricing we are seeing for Jan and they are rather high.  

Almonds:

Last week was a  slew of depressing doom and gloom emails from farmers,  this week they have been tempered with some rays of light, such as the initial thoughts of 30% damage now seems to be around 15%, this is just on the Non parrel varieties we still awaiting for more accurate reports on the California variety.

Saying that growers are currently off the market completely. This month’s shipment report wont reflect the market due to the fact it’s still old contracts, the real indicator will be the October shipment report which will show us if there is market resistance to these crazy prices. That shipment report will be a better barometer in terms of customer demand. If the shipment report is high then it will show the growers that demand is still very strong which in turn will legitimize these outrageous prices, if not we should expect to see a slight correction which will think/hope will happen.

Pecans

We are hearing an abundance of rumors of a mammoth crop. Some packers are even predicting a new record and a bumper crop of 300 mill MT+ (combined US/Mexico). Based on this we should see a significant drop in pricing come Jan, and we just have to weather (get it) the storm for a bit longer and we shall see plenty of offers and plenty of movement after the holiday season. Caveat, till that comes about, current year crop can and looks like to continue to go up in the interim.  

One small thing to keep an eye on, though it’s unlikely, growers are saying that with the new process of shelling one is getting a complete nut and less and less pieces (which is good for the farmers) a situation similar to Cashews LP’s. We could see a lack of Pecan pieces and that could spike pricing in the long run.

Walnuts

The Walnut board meeting is today and we should know all we need to know hopefully by tomorrow and will update. Saying that we said last week that harvest looks good and price should take a larger drop from where it was trading as it has already dropped slightly.

Pistachios.

Rumors are of a smaller crop this year than previous, we have no real feel back to predict anything, will keep you all in the loop 

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

Turkish Hazelnut

c/o AFI(Association of Food Industries)

Some members of the task force on this issue met June 4 with representatives from USDA and a commercial counselor at the Turkish embassy in Washington.

We met first with USDA. They had about eight people there, though five senior-level staff members did all of the talking. The consensus among our contingent was that USDA staff is correctly performing the inspections on hazelnuts. USDA staff said it’s important for us to understand there are two issues here. The first is the grade standard for hazelnuts. The second is the marketing order. The product requirements in a marketing order do not have to match the specifications of the grade standard, so they recommended that if we’re seeking to make any changes, we try to do it to what’s required in the marketing order. If we sought and were successful in getting a change to the grade standard, we would have to go through the process to make a change in the marketing order anyway.

Changes to a marketing order have to be suggested by the committee that runs the order. In this case, that’s the Oregon industry. The committee is due to have a meeting in August. The group that went to the meeting is going to recommend to the task force that AFI be given time at that meeting to explain the need for a change to the order. Of course, we have to find a way to incentivize the domestic industry to agree to suggest any changes.

Our meeting with the Turkish commercial counselor was very beneficial. It was clear that based on her conversations with others she thought USDA had made changes to the way it was conducting inspections. She and others thought the problem could be rectified simply by requesting USDA return to prior testing methods.

We are putting together a letter to be sent to the counselor and to the Turkish Hazelnut Group with recommendations/information from Jeff Abels(Foreign Trade Service) on how to address this issue at origin.

The task force is meeting via phone this afternoon to discuss next steps.

As for the request that the association put out a statement saying the USDA issue has created a force majeure situation, three law firms have told us they do not believe that is viable, though all have said it might be so for contracts specifically calling for Turkish hazelnuts. All three, though, have said they recommend such a statement be done by individual companies and not the association.

As everyone is aware, imports from Turkey for hazelnuts have been stopped by USDA, due to food safety issues and concerns.  We will keep you up to date on any changes.

- Thomas Kim

"Other" Nuts/Dried Fruits

So, I've been a bit lax in updating the blog, which I blame on the workload and lack of significant market update since the last one...(This is a lot better excuse than simple "laziness")

c/o Mr. Henry Stimler
Almonds:

Market has been strong but we all feel an upcoming lull in the market, which is to be expected since everyone is awaiting the June 30th objective report, so customers and growers are treading very carefully. Pick up what you need spot and await the numbers. Again post report we don’t think we will see any sort of a dip if anything it will just be at a stable plateau. Post report we feel the big growers will open strong and wait for market resistance or acceptance.

As far as almonds 27-30 that has moved a bit since not that much supply around currently.

Pecans:

We have felt strong movement in the recent days and weeks and the price is moving in an upward trend. The next crop is not till November 15th, and the demand for the holidays will be very high with not that much inventory meaning it will be a sellers market for old crop. Post crop we think that pricing will come down, but it seems that the freeze did some affect on crop numbers.

Pistachio:

The price is what it is and we are seeing very little fluctuation in price and don’t think we will see much movement till new crop Sept/Oct

Ginger:

Yes pricing is high right now but for forward contracting post Sept we will see a price drop and we advice to start forward booking at that time for best possible pricing.

Apricots:

Pricing has gone through the roof but we are sitting pretty having purchased very well and have a good amount of stock, if you have contracts it’s going to be very tough to get product out now at anything resembling a normal price and we think this item is going to be retired by a lot of people and retailers till next year.

We are now coming into the summer months, which are traditionally a bit slower than Q1 and Q4.  Majority of customers are now gearing up and planning for Q3/Q4.  Everyone is watching and testing the markets carefully to decide best time to commit to contracting for this year's holiday season.  Please check back with us frequently for additional updates as they become available.

Thank you.

-Thomas Kim

Cashew Market Update

It has been awhile... and not so quiet, as it seems

It is a difficult time for the cashew processors.  If the prices do not increase, then the processors can face problems down the road

During the last few years, with technological innovations, there are so many new small factories coming into the market.  There is no need for large space or capital.  They can just process cashews(steam, shell, then sell the kernels to other processors).  Because of this, the demand for RCN is trending higher.  Vietnam also exports more and more every year.

The export from Vietnam is increasing, mainly based on the supply of seeds from Africa.  With lower cost of production, Vietnam is a bit ahead of India and have enjoyed better business atmosphere.  Recently, however, some factors have changed from India

- India have imported a lot of machines from Vietnam and have begun replicating and have begun to lower production costs to compete better with Vietname
- To stop cheap broken cashews(WS, LP or SP) from Vietnam to India, Indians have applied flat duty at $1 USD/lb.  Indian processors can enjoy selling broken cashews at higher price in domestic markets
- Indian market have always had a lot of demand.

Because of these factors, this year, Vietnam processors are finding it harder to pay for RCN prices from Africa.  The RCN prices have gone up tremendously and mainly shipped to India

A. African Seeds
  Because of big demand from India and Vietnam, the prices have continued to rise.  IVC seeds seem close to an end.  Buyers are in a hurry to purchase and ship.  A good quality 48lbs, which used to trade at 900 USD/mt, are now at 1050USD/mt CNF Vietnam.  Most buyers are now competing on Guinea Bissau RCN.

B. Vietnamese Seeds
   The crop has ended, and only few small crops from northern provinces.  There is high competition for seeds.  Prices on seeds, which were trading at around 23,000 VN$/kg are now up to 25,000 VN$/kg.  For this new price level, factories are covering mainly because they do not have enough seeds to process during Q3 and are hoping(betting) that prices of kernel goes up

C. Broken
   Most buyers believe that there are a lot of broken pieces during processing.  It may be the case in the past, but improvements in procedure have lowered available supply of broken kernels.  Before, we were seeing 20% broken from processing RCN, but some processors have gotten these numbers to 12%

D. Market, western
   It looks as though US and EU buyers have covered enough for nearby, when the pricing had bottomed out.  I do not expect pressure from buyers to make purchases in the near future, though they will move if the pricing is right.


With the current market conditions, I would advise that spot purchases for your immediate needs.  I would only consider contracting options if you need to cover a certain quantity by Q4, and only at a "deal".

Thank You.

-Thomas Kim



   

Cashew Market Update

1- Vietnam crop: the crop continue in other center provinces (a bit further North), but it is small crop and price is getting higher than before. Dry raw seed traded around 24,000-25,000 VN$ per kg for 30% outturn (Vietnam calculate %). Comparing to African seeds, price is still more attractive than African seeds because transportation cost in Vietnam has gone up very much. But the disadvantage is that you have to pay money up front, full amount, while with African seeds you can only deposit 10% to open L/C and only pay after

45-60 days when cargo arrive.

I think lack of finance is the main reason for raw seed price is reasonable in Vietnam.

But in general, price is up 25-50 USD per tons if we compared with same quality as before.

2- African crop: 

- Ivory Coast: it is raining and quality is getting down. I think up to now the IVC government has been successful keeping the minimum price. With strict control like cancel export license and cancel local buying license, they remain same minimum buying price although out turn is less. There has been few meeting between IVC cashew board and exporters. Exporters try to convince the IVC government that out turn is now less (46 lbs) compared to before around 49 lbs so minimum price should revise. But IVC does not agree, they still remain same minimum price. Indian and Vietnam have been waiting and hoping for price to come down, but they cannot wait for too long, so India and Vietnam start to pay the price, raw seed begin to move up. This year, raw seed is moving more to India than to Vietnam.

Shipment from IVC is quite slow because of congestion. Formality is also very slow. Exporters complain that everything is slowdown in IVC, very difficult to have containers, very difficult to have space on the vessel, trucks have to wait for so long to have space in warehouse....

In general they say crop is okay, but if they cannot ship out fast, quality can be down as the rain is coming.

- Other origin: price also follow IVC price, so it is going up too around 30-40 USD per tons.  Most my medium raw seeds traders are complaining that business is getting more and more difficult because big group of companies entering the market and spoil the market, pushing them to take position.

3- Processing: monsoon season is coming, so sometimes there is small rain, moisture will become higher from small/medium factories if they face the rain. So during June, when there is more rain, I think quality will be down from small/medium packers. Processing is getting better in Vietnam because after harvest, workers will slowly returning to work.

4- Domestic market: Performance of LP is having problems. 1.75-1.78/lb fob level. Demand for LP is quite good.  I think in domestic market, price will be even up more by end of May, because many exporters have over sold, so by end of June they will need to cover to ship. Why exporters have over sold??? I think the main reason is that they always sell based on current domestic market level. But when buyers feel that price has reached the bottom level and begin to book many, price will be up immediately. Exporters (traders) do not know about this, so will get stuck. Only processors who have raw seeds in the warehouse can avoid this problem.

Recently there are so many exporters who do not process (exporters with just packing centers, who does not have a chimney in their factories), they only buy from small processors, do some re-grading and pack in their brand. There are too many of those, so competition is very tough.

5- Western market: by end of April and early May. Market is more active as western buyers are buying. During these days, Western market continue to buy more May and June shipments, so price is moving up.

At current market of raw seeds imported from Africa, packers will need to sell higher than this level to make money.

It seems like market is on the up side, especially LP from a high quality packer.  If you have needs for forward contracting, please contact us and let us know how we can help.

-Thomas Kim

2014 USDA Subjective Almond Crop Estimate

USDA has released 2014 almond crop estimate, subjective.

The subjective forecast for the 2014 California almond production is 1.95 billion pounds. This is 2.5 percent below last year's production of 2.00 billion pounds. Yield is expected to average 2,270 pounds per acre, down 4.6 percent from the 2013 yield of 2,380 pounds per acre.  Forecasted bearing acreage for 2014 is 860 thousand. The subjective production forecast is based on a telephone survey conducted from April 15 to April 29 from a sample of almond growers. After the warmest winter on record for California, the
almond bloom began in early February. The 2014 bloom was one of the earliest almond blooms in memory.
Orchards required irrigation in the winter months due to the lack of precipitation, but rain early in the season offered some temporary relief. Pest and disease pressure has been lower than last year. Overall, the 2014 crop is developing faster than last year and harvest is expected to start early. Water is a concern for many growers this year.

The short version... it's just what we expected.  While the prices of almonds will not "shoot for the moon", we're also not going to see it crash(as buyers were hoping).  The market will remain stable and seller/buyer will be paying close attention as we get closer.  Look to the objective estimate from USDA(which is more accurate) on June 30,2014 12:00PM

-Thomas Kim

Cashew Update

OK... so below is the latest update from

Vietnam crop: The major crop in Binh Phuoc has ended. Now crop is coming from other areas, but it is not big crop. Price of raw seed is stable. In some area, price is cheaper but mainly because of quality is poorer being end of crop (quality is always worse by end of the crop).

West African crop: There is also not much changing on the price of seeds. Price remain stable, IVC cashews 48 lbs still being offered around 900-920 usd/mt cnf Vietnam. Basing on the current low level of WW240 and WW320, Vietnamese buyers are not aggressive buying from West Africa.

Outturn is getting lower, so most sellers are offering at lower level for 46-47 lbs outturn instead of 48 lbs outturn.

IVC cashews: remain 900-920 USD/mt cnf for 48 lbs outturn.

Ghana: not much offer because IVC government stop border trading. Price idea for 47 lbs at 950 usd/mt cnf

Benin: 1050 usd/mt cnf for 47 lbs outturn

Nigeria: 770 usd/mt cnf for 47 lbs outturn.

Guinea Bissau offered around 1,100-1,150 usd/mt cnf for 52 lbs, but nut count is small around 220 nuts/kg

In general, Vietnam will need to buy a lot of more from Africa, but at this price level, buyers feel it is not attractive price. They need cheaper price to buy more raw seeds. IVC government is still trying to control price, up to now they seem to be successful, so seed price is not cheap (compared to kernel price WW320 around 3.05/lb fob level).

Processing: still good and will be better in May because more and more workers return to work as the harvest is going to be finished.

Vietnam domestic market:

There are still few rains, the air and the land will get higher moisture. Small/medium packers do not have system to control moisture, so quality is down now. From small/medium packers, cashew kernel will tend to be softer (moisture is higher) and color is a bit more yellowish (not as white as before).

WW240 price is down because supply is better than demand

WW320 price is stable or just down a little bit.

WW450 price is down a bit

WS price stable

LP price is up very much because demand is good.

SP: not much demand because of foreign admixture in SP from Vietnam.

China market: In March, China has bought good volume from Vietnam. They bought WW320 at around 7.3 usd-7.40 usd/kg. But later, Vietnam keep decreasing price of WW320. So people who covered WW320 before at high price are now selling WW320 at a loss of around 15-25 cent/kg. Basically they reduce buying WW320 from Vietnam. So Vietnam will have more pressure to sell WW320 to Western market. The weather is getting warmer, so consumption of nuts in China will be less. They will consume more during Autumn Festival in Aug/Sep

Most Chinese buyers complain that recently, the new government in China is trying to control corruption and government spending. It also affects cashew consumption.

Western market: As price is bit down, so we see business traded here and there. Sales seem to improve in most of the market: USA, Europe, Middle East….There is more buying interest in May, June

Price by grades:

WW240: price keep coming down. This year Cambodia seeds are bigger, so supply of WW240 is okay.

WW320: I do not see much down trend on WW320 because at this level, quite some small packer are working under profit, because they covered raw seed before at high price.

WW450: not much demand. I think price is down trend a bit

LP price is up, demand is quite good. I think it will continue to be up trend. Low price contracts might be getting delay….

Basing on raw seeds price in Vietnam (many had bought before at high price), basing on stable price of seed in Africa, I do not see much down trend of price of kernels. Sellers will resist selling low unless they have to. Supply of kernel for export will be more in May.

So during the next coming weeks there will be questions:

Will Western buyers buy more at this price??? If they buy more, price will be come stable or slightly up and down. I see quite many inquiry on WW320, seems that demand for WW320 is okay.

If Western buyers do not need much in May (demand not so good for WW240 and WW450 for May shipment), then Vietnamese shippers will have to sell at lower level. Quite some will be under profit.

Will West African raw seed be cheaper??? If it is cheaper, then Vietnam can sell kernels lower.

As for price of LP, since demand is good, so I think price will be up. Our inspectors are rejecting more quality of LP, because price is more expensive, so small/medium packers tend to mix more of lower grades into LP. We are putting more care and inspectors to control quality as the monsoon is coming, quality is down.

Please note that I see more buying interest for WW320 for May shipment. Current price level seems to be attractive.

It is certainly in your best interest to start looking for your bookings for Q3 and Q4.  After the "dust" settles, I do not believe that we will see these price levels for awhile.

-Thomas Kim