Tight Old-Crop Walnuts, Quiet New-Crop: Market Braces for USDA Delay

California walnut supplies are tightening rapidly as the 2025-26 season winds down, with strong kernel and inshell shipments leaving only minimal uncommitted stock and keeping a floor under prices. With new-crop trading still limited and the official USDA crop estimate pushed back to 1 October, the market is entering the 2026-27 cycle in a much better balanced position than in previous surplus years. After months of aggressive movement, the walnut market is transitioning from clearing old-crop burdens to assessing the size and quality of the incoming harvest. Export-led strength in both inshell and kernel sales has sharply reduced carryout risk, giving growers and handlers more pricing power as buyers start to turn to new-crop coverage. At the same time, flat to slightly firmer kernel offers from China and modest gains in organic kernels signal a stabilising global price environment. Weather and the delayed US production update will be key drivers of sentiment over the coming weeks.

Prices

Chinese origin walnut kernels on FOB Dalian terms are currently indicated around EUR 3.30/kg for light quarters, EUR 2.85/kg for light pieces 8–12 mm and EUR 2.30/kg for light amber pieces 8–12 mm. Conventional Chinese prices have been broadly stable since late July, consolidating after minor fluctuations earlier in August. Organic light halves show a firmer tone, with US origin around EUR 4.55/kg FOB London and Indian origin near EUR 5.35/kg FOB New Delhi, both slightly above mid-August levels. The combination of tighter California old-crop stocks and steady Asian kernel offers points to a mildly supportive short-term price bias rather than renewed downside pressure.

Supply & Demand

California shipments from September 2025 through July 2026 reached about 1.485 billion lbs (inshell equivalent), a strong 25.6% increase versus 1.183 billion lbs a year earlier. Cumulative inshell shipments nearly doubled to 304.8 million lbs, while kernel shipments rose 14.6% to 501.6 million lbs, underlining broad-based demand recovery across product forms. July itself remained robust in aggregate, with total shipments up 27.5% year-on-year to 85.7 million lbs on an inshell-equivalent basis despite a 43.8% drop in direct inshell volumes.

The season started with 139.3 million lbs of carry-in and crop receipts of roughly 1.619 billion lbs, giving total available supply near 1.758 billion lbs. By the end of July, shipped and committed volumes accounted for 97.5% of this availability, leaving only very limited uncommitted stock ahead of the new marketing year. Inshell’s share of total season-to-date shipments has risen markedly, with kernels now representing 79.5% of shipments versus 87.1% a year earlier, reflecting particularly strong growth in cumulative inshell exports and a healthier global product balance.

Fundamentals

The rapid drawdown of California inventories is the key structural shift compared with previous seasons dominated by heavy overhang. Outstanding commitments of around 229.6 million lbs at the end of July signal sustained demand into the transition period and limit the volume of walnuts still available for spot business. Conventional product continues to dominate with 98% of receipts, while organic remains a small but price-sensitive niche at 2%, where modest price firming is already visible in recent European and Indian offers.

July’s shipment mix further underscores the market’s reliance on kernels, which made up 96.8% of monthly movement compared with 92.8% a year earlier. This kernel-centric offtake supports pricing for better colour and size grades, while inshell demand strength over the season has helped rebalance sizing and quality spreads. With most of the old crop effectively placed, the industry is now better insulated from discount-driven liquidation and can approach 2026-27 negotiations from a more orderly starting point.

New-Crop Outlook

Attention is increasingly turning to the 2026-27 crop, but trading in new-crop positions is still limited as market participants wait for clearer production signals. The postponement of the USDA walnut production estimate to 1 October allows more time to assess late-season development, but it also prolongs uncertainty on potential yield and size distribution. In this context, buyers with nearby cover requirements are beginning to extend coverage selectively, while larger, longer-term commitments remain rare.

Weather during the final stages of nut fill and pre-harvest will be closely monitored, as even modest deviations from normal could meaningfully influence kernel yield and quality in a tighter fundamental setting. With carryout risk sharply reduced, any downside surprise in the official crop estimate or adverse harvest weather would likely translate quickly into firmer price ideas, particularly for high-demand kernel grades and organic product.

Trading Outlook

• Buyers with Q4 2026 needs should consider securing at least partial coverage now, given very limited old-crop stocks and a more balanced starting point for 2026-27.
• Growers and handlers can afford to resist aggressive discounting on remaining spot volumes, focusing instead on timing sales around the 1 October USDA estimate and early harvest feedback.
• Kernel buyers sensitive to colour and size are advised to pre-negotiate options on new-crop shipments, as quality-related premiums may widen if harvest conditions prove uneven.

Short-Term Price Direction (3 Days)

Over the next three days, FOB kernel indications in China are expected to remain broadly stable in EUR terms, with only minor day-to-day adjustments driven by currency and freight. European and Indian organic kernel offers are likely to hold a slightly firmer bias, reflecting tight availability and improved demand. Overall, the global walnut market should trade in a narrow but supported range as participants await clearer news on the US 2026-27 crop.