US Walnuts, Market Update
Total shipments increased 11.7% inshell equivalent for the month vs. June 2022.
Domestic shipments increased 70% inshell equivalent, led by the USDA purchasing program.
Export markets continued to decline for the fifth month in a row, down 20% inshell equivalent.
Demand in Europe is lackluster, while Middle Eastern shipments have increased more than 25 MM lbs. so far this marketing year.
Asia Pacific demand is effectively flat.
The 2023 crop is progressing well, but the recent heat could impact yields.
Pricing on new crop is stabilizing, with U.S. prices moving higher to close the gap with Chilean offers.
Carryout is expected to be virtually flat against last year (+4K T).
Domestic shipments
Domestic shipments increased 70% inshell equivalent for the month, led by the USDA purchasing program. Shipments to the domestic market are now 27% ahead YTD for shelled, and 1.4% for inshell this crop year.
Export markets: Export markets continued to decline for the fifth month in a row, showing a drop of 20% inshell equivalent. This decline brings the YTD export shipments to -4.7% inshell and -10% shelled for this crop year. Demand in Europe continues to be lackluster at best, with YTD shipments down over 55 MM lbs. in total. Middle Eastern shipments have posted more than 25 MM lbs. in gains so far this marketing year. Meanwhile, YTD demand in Asia Pacific has shown less than 5 MM lbs. of declines, making it effectively flat.
2023 crop: As the days roll on, the 2023 crop continues to progress. Despite initial talks signaling for a healthy crop and large sized nuts, it is too early to give any reports. The recent and prolonged heat that we have seen recently (110+ F) could impact this progress, as there are several weeks of heat at and above 100 F that will be seen through harvest. With the new crop on the trees looking healthy as of now, U.S. sellers have very slowly begun to engage in new crop business. Pricing on new crop is reflecting a more stabilized market. Price spread on certain ‘22 crop products vs. ‘23 crop Chilean offers have closed considerably, with U.S. pricing moving higher to close the gap. At this point in the season, handlers in California are thin on inventories. Availability is scarce, and specific products are hard to find.
Carryout
Looking forward, we are anticipating the carryout to end virtually flat against last year (+4K T). This is assuming no end of year adjustments to inventory will be made, including with the recent reduction of crack out percentage to 40.1%. With current shipments at just 3.5% above last YTD, we need the next two months to maintain at or above last year to keep us in positive territory which should be possible given forward commitments are +14% vs. last year.