US in-shell shipments jump while China kernel prices firm: walnuts turn tighter

US walnut shipments are accelerating, with May showing a sharp rebound in in-shell exports and steady kernel movement, while rising Chinese kernel prices add a firmer tone to the global market. Overall season-to-date volumes are slightly above last year, but the mix is shifting toward exports and in-shell demand, tightening old-crop availability in some destinations. The latest shipment data confirm that US handlers are successfully moving stock, particularly to selected overseas markets despite softer demand in parts of Europe and Asia. Stronger shipments to South Korea, Vietnam and Brazil, combined with a firming price environment in China, suggest that the period of deep walnut oversupply is easing. At the same time, nearby kernel prices in China, India and the US remain broadly stable in euro terms, pointing to a more balanced but still price‑sensitive trading environment as the 2026/27 crop approaches.

Prices

Chinese walnut kernel prices have risen by about USD 70–160 per tonne versus last year, underpinning a firmer global floor, while early-July assessments in China, India and the US indicate largely stable FOB levels in recent weeks. Converted into euros, mainstream Chinese light kernel pieces currently trade around EUR 2.10–2.40/kg FOB equivalent, with higher-quality quarters and halves from China and the US increasingly testing the EUR 3.00–4.50/kg range depending on origin and grade.

Indicative spot offers confirm this stability: Chinese light 8–12 mm pieces are around EUR 2.85/kg FOB Dalian, with light amber pieces near EUR 2.30/kg, while broken kernels sit just below EUR 3.00/kg. US organic light halves are offered around EUR 4.50/kg FOB London, and Indian organic light halves near EUR 5.30/kg FOB New Delhi, reflecting their premium positioning. Overall, the price curve remains flat week-on-week, but the combination of stronger US export draw and firmer Chinese farm-gate levels suggests limited downside for good-quality product.

Supply & Demand

US shipment data show a strong recovery in May: total in-shell shipments reached 12,862 pounds versus 5,558 pounds a year earlier, with exports at 12,498 pounds and domestic use up 11% to 364 pounds. Season‑to‑date, total shipments are near 300 million pounds, about 2% above the previous season, driven by export shipments up 114% and domestic sales up 47%, confirming that global demand has absorbed more US supply this year.

Regionally, patterns are uneven. Shipments to Europe increased by roughly 15%, yet kernel exports to the region slipped 5%, and over the 2024/25 season European in‑shell volumes eased from 55.8 to 53.1 million pounds while kernels fell 13%, indicating some substitution between formats and continued price sensitivity. India’s intake is about 10% lower and Asia‑Pacific overall is down 5.2%, but this is offset by sharp growth to Vietnam (kernel imports +88%), South Korea (+44%) and Brazil, where competitively priced US in‑shells and kernels have found new demand channels.

Fundamentals

Two key shifts underpin the current balance. First, US in‑shell exports are particularly strong, with May in‑shell shipments alone reported at 39,267 pounds versus 31,815 pounds in May last year, a gain of 23%, while kernel shipments increased 2% and total exports 41%. Second, China, the world’s largest walnut producer, reports rising kernel prices after two weak years, as crop prices have climbed by roughly USD 70–160 per tonne compared with last season. These moves collectively tighten old‑crop availability and lift replacement costs.

Broader tree‑nut market indicators show walnut prices stabilizing after several years of structural oversupply. Recent USDA and industry outlooks point to improved demand and more disciplined supply growth across tree nuts, while terminal market reports in the US describe the walnut market as steady with light offerings rather than burdened by excess stock. This supports the view that current flat prices conceal a gradual rebalancing, especially in higher‑quality in‑shell and premium kernel categories.

Weather & Crop Outlook

Weather in California and key Asian origins is being watched closely but has not produced a fresh supply shock so far. Warmer‑than‑average spring conditions in California accelerated development for many tree crops, and field reports suggest a generally solid walnut nut set, provided temperatures remain within seasonal ranges and late‑summer heat events are managed through irrigation.

In China and India, current commentary indicates normal seasonal conditions in core growing regions, with no widespread damage reported that would materially alter 2026/27 supply expectations. Market participants therefore focus more on demand trajectories and currency moves than on immediate weather risks, although localized storms or heat spikes over the next two months could still impact quality and harvest timing.

Trading Outlook

• Short term (next 2–4 weeks): Expect mostly sideways prices in EUR with a mild upward bias for premium in‑shell and high‑grade kernels, as strong US exports and firmer Chinese farm‑gate values limit downside.
• Buyers: Cover Q3–early Q4 needs on dips, prioritizing Chinese pieces and US kernels where price differentials remain attractive versus Indian and niche origins. Avoid over‑extending at the very high end as demand in Europe and parts of Asia remains price‑sensitive.
• Sellers: Maintain disciplined offers; consider gradual price increases for top grades and in‑shell lots where nearby availability is tightening, but stay flexible on lower grades to keep pipeline movement ahead of the new crop.

3‑Day Price Indication (EUR)

• China FOB Dalian kernels: Stable to slightly firmer, about +0–1% expected as buyers test offers but underlying replacement costs rise.
• US kernels FOB Europe (e.g. London): Largely steady in EUR terms; minor firming possible on premium organic halves given strong export pull.
• India FOB New Delhi kernels: Sideways; high absolute price level and softer imports into India itself cap further near‑term upside.