The peanut market has moved back into cost-of-production territory after a long stretch of oversupply, according to Alimenta Agri LLC. Prices are firm across the US, Argentina and Brazil, and the analysis sees more upside than downside for the short to medium term, with supply, crop size and quality driving the next moves.
In the US, weather has flipped from too dry to near-daily rain in the southeast, slowing fieldwork. As of late May, planting was 60% complete against a five-year average of 65%. Alimenta expects US plantings to fall 20% versus last year, more than the USDA’s 14% estimate, after an earlier cotton rally drew acreage away before fading back to around 79.5 cents. On a 20% reduction and average yields, the report does not see a crop much above 2.9 million tonnes. New-crop trade is thin, pegged between 55 and 58 cents depending on cuts, with shellers cautious about how many uncontracted tonnes they can secure and at what price.
Demand remains the soft spot. US peanut and peanut butter offtake is flat to weak despite a high-inflation backdrop that would historically lift sales, and European demand is under similar, hard-to-explain pressure. USDA stocks data offered some encouragement, with peanut snacks up 29% and peanut butter up 5% in April year on year.
South American origins are firm but quiet. Argentine shellers are seeking $1,450 to $1,600 depending on grade, with buying interest slow and good coverage already in place for the second half. Cold temperatures and frost during harvest may dent quality, and a possible EU move to a 20% aflatoxin inspection rate on Argentine arrivals could add cost. Brazil’s new crop is in with good quality, but growers facing roughly doubled production costs since 2020 are pushing for higher prices, and another acreage cut is possible if they do not materialise.
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