DOMESTIC COMMODITY UPDATES

There is so much going on right now that it’s hard to choose what to discuss. We will try to stay focused on the matters at hand. I for one like to stay away from matters that are affected by the presidents mood, nor do I pretend to understand a New England comeback from 28-3 to win the superbowl! New FSMA regulations is something we’ve already been tackling as we stay one step ahead to ensure that Kaynarfood and its valuable customers are in full compliance, but that’s for another discussion so back to nuts it is… ?

Cashews

There is much anticipation on what may happen in the next week or 2 as packers are returning from holiday. There is plenty business that have not been booked yet and many are holding out for better quotes. We may see a lot of packers bring down their offers in an effort to move what’s left of the crop. They cannot wait too much longer as new crop draws near, usually in March / April. Another factor to consider is the chain reaction of higher prices the last few months. For example, cashews are priced nearly twice as much as almonds in most major supermarkets, which may very well affect consumer use. On the other hand, if new crop is delayed we may be right back to square one.

All of this speculation is based on very real information, but let us not forget a most critical factor. At the end of the day nobody wants to take position in such a volatile market. Most traders and distributors are buying hand to mouth which means limited product domestically which would typically result in a tight market regardless.

We are recommending our valuable customers to book through 2^nd quarter as needed, and at the same time keep their antennas up for market shift (hopefully downwards).

Almonds

Today, As we wait for the Jan shipment report, which may very well show a strong shipment report as predicted, we are seeing a variety of price levels across the board. The market has definitely eased a bit recently and rightfully so. We are in the middle of a huge crop, over 2 billion pounds, and weather reports are pointing to possibly an even bigger crop next season. Even if tomorrows shipment report causes some slight increases which tends to happen, I don’t think it will last. At the end of the day this huge crop has got to sell. Like any good market, there’s always another side of the story. There are those that claim that a wet bloom (which is being reported) may cause a smaller / lesser crop, and they do have some science to back that up.

In summary, Almonds are still at very comfortable levels overall and you can’t go too wrong. Taking some position through 2^nd quarter would not be a bad move.

Pecans

This should really be split into 2 markets. We have the domestic top packers who all claim they are either sold out or extremely limited and their prices reflect such, then you have the smaller guys who have been coming into the market recently with relatively attractive offers with decent quantities to go around. There is definitely much resistance to book at these levels and I don’t blame them. Everything that we are hearing and seeing seems to point to a tight market, possibly throughout the rest of the season. It may be wise to take advantage of today's pricing, but as they say, anything can happen.

Walnuts

We only just began the new season and already supply is short. Quality for the most part has been very good and we are seeing a much bigger shortage on Combos because of it. Market has definitely firmed across the board, but in general walnuts are not overpriced yet.

Mehmet Kaynar

CEO