Walnut Market and Crop Update - June 2019

Market 

Markets have been relatively quiet since Chile has started to ship in the Spring.  Chile is relatively sold out, much more sold then this time last year.

In California most inventory is also sold out as well.  The market overall seems pretty tight on inventory except for a few items, but the Californian Walnut Board expect most, if not all, inventory to be cleaned up in advance of new crop . Recently traded prices are as follows: Combo HP $2.40, LMP at $2.55, LLP at $2.45, LHP 20 at $2.65-2.70, Chandler LHP 20 at $2.75-2.80, Chandler Halves at $3.15-3.20, FAS CA basis. Most buyers are now focused on new crop offers from California.

The June 2019 shipments versus the June 2018 shipments on an inshell equivalent were up 3.9% with +31,599 tons in 2019 versus 30,379 tons in 2018;

• Domestic – June 2019 shipments versus 2018 shipments on an inshell equivalent were up +3%
• Export – June 2019 shipments versus 2018 shipments on an inshell equivalent were up +5%

The Key Market Shipments:  June 2019 versus June 2018;

• Kernels Europe:86 million pounds vs 4.2 million for an increase of 15.89%
• Inshell Middle East: 533,000 lbs versus 1.35 million for an decrease of 60.55%
• Inshell Turkey: 448,452 lbs versus 264,552 for an increase of +69.5%%
• Shelled Germany: 546,800 vs 1.09 Million for a decrease of (-49.86% )

New Crop

Early reports from California Industry Experts, is that Chandler crop looks relatively good. Tulare coming off a huge crop last year is expected to be down this season. Howards look very inconsistent, some saying same as last year while others say they will be down. Early varieties look to be down this year with many of the older varieties/older orchards being pulled out this year.  Most expect a crop size similar to last year at 680,000 tons with some even stating it could be as high as 710,000 tons.  The estimate will be released in late August.  It does feel that there has been much less business booked early this summer compared to last year, sellers and buyer seem content on waiting…with sales picking up this week.

Pricing

New crop pricing can be described as unorganized. Sellers want as high as 1.20 FAS for Jumbo Large Chandler while buyers want the profitable levels, they briefly had last year at 1.00 FAS. Recent business has been reported at 1.12-1.15 FAS for Chandler and Tulare at 1.09 FAS and Howard at 1.08 FAS. Bids at these levels have had mixed success, bids lowers have had zero success.  While buyers may initially resist Chandler at 1.15 FAS or higher, it may be worth considering that 2 years ago these levels were considered cheap and are lower than the prices which Chile sold most their crop this year.