OCT. 2018 WALNUT MONTHLY MONTHLY MANAGEMENT REPORT AND DISCUSSION
Today, the California Walnut Board released the Oct. 2018 Position Report. Total October 2018 shipments were down 14.1% from prior year with Exports down 21.7% and Domestic shipments up 11%. YTD shipments were down 10% with Exports down 19.6% and Domestic shipments up 11%. Our table of these figures are shown below:
Tons Tons %
Oct. 2018 Oct. 2017 Change
Crop Receipts 597,269 569,560 4.9%
Carry in 9/1 63,539 55,976 13.5%
Total Supply 660,808 625,536 5.6%
Monthly Shipments 91,416 106,454 -14.1%
Export Shipments 64,134 81,881 -21.7%
Domestic Shipments 27,281 24,573 11.0%
YTD Shipments 118,155 131,267 -10.0%
YTD Export Shipments 72,274 89,942 -19.6%
YTD Domestic Shipments 45,881 41,325 11.0%
Inventory 542,653 494,269 9.8%
Shipments as % of Crop 19.8% 23.05%
Shipments as % of Supply 17.9% 20.1%
YTD shipments of 118,115 compare negatively with the prior year by 10% but all would concede that the crop was late by two weeks thus delaying sales as well as possibly pushing back crop receipts as of 10/31/18. Crop Receipts are 597,269 ton compared to 569,569 ton prior year. Normally, a good approximate number is that 90% is received by 10/31 thus providing an implied estimated 663,632 inshell ton crop and compared to the estimated 691k ton crop. Quite possibly there is more than 10% remaining to come in and that might push the number higher than an implied 663K ton. Additionally, the USDA Trade Mitigation program should add another 30,000 inshell ton worth of sales. If the government buys all that they have indicated they will buy, then the true number to move would be about 633k inshell ton and only slightly more than the total crop received last year of 628K ton when prices, on average, were significantly higher.
YTD, Turkey purchased 16,959 ton compared to 24,645 ton the prior year or down 31% but we know that Turkey's currency appreciated handsomely in the past two months with many containers sold and destined to ship in November 2018 so Turkey's inshell sales should catch up significantly. Turkey has been able to sell all their Chilean inventory so the U.S. should see strong shipments the next two months. We see that YTD sales to Japan are down 32% yet surprisingly sales to Korea up 38% which is good sign as Korea had thought to be in a glut position yet they are ahead of prior year.
Chile might add some headwinds to this season. Chile will not want to be in the same position that they were this past season where they were long and had inventory up through August 2018 thus negatively affecting U.S. sales. With their ability to capture Ramadan sales gone for many years, one would think that Chile will come out aggressive upon their opening in April/May 2019 to fill many of the worlds walnut coffers and add significant competition to California.
Pricing for walnut material is as follows: Domestic LHP $2.30 - $2.40/LB, Export quality 20% LHP $2.40 - $2.60/lb. CHP is in the $2.15/LB to $2.30/LB range. Chandler Halves in the $2.50 to $2.70/LB range. All prices seem to be about $.20/LB higher than their earlier lows.