Senior Vice President
Receipts for the 2018 Crop through September trail the prior year by 1%. It is always difficult to draw conclusions from gross receipts this early, though it appears the crop will fall short of the 2.45 billion lb Objective Estimate.
Shipments for September were 89% of the prior year, and trail YTD by 10% and 36 million lbs. The slower shipment pace is driven by shortfalls in China, Turkey, the UAE and the EU. The U.S. market is flat to last year.
Commitments are 164 million lbs or 23% behind the pace of last September. While the commitment number is lower than expected, sellers have been cautious since the freeze last February, moving slowly through the spring, and in some cases now waiting for a rebound in pricing. Buyers at the same time have been in a short-term coverage mode, not wanting to commit too long due to the uncertainty of forward prices, primarily caused by equally uncertain trade policies.
Packers and growers are debating declines in both nonpareil and pollinizers crops. Overall crop quality is better than last year with fewer rejects. NP kernels and some pollinizers appear to be one size smaller than last year.
Demand at the consumer level remains strong world-wide, but the trade conditions and confidence to make key buying decisions is handcuffing buyers and sellers who are waiting for additional information before making key decisions. There are a few markets in which the industry is at risk to miss key early consumption periods.
Nonpareil pricing has exhibited more stability, firming in recent weeks.
The gap between Nonpareil and pollinizer pricing remains historically narrow, even as pollinizers have begun being harvested, processed & shipped.
Global demand at the consumer level remains strong. Over the course of the year, the supply of the 2018 crop is relatively, closely balanced with demand. However, there are likely to be short windows of activity throughout the year where supply and demand will be less well matched.
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