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Why the Select Harvests (ASX:SHV) share price is on watch

The Select Harvests (ASX:SHV) share price will be on watch this morning after the company released a market update late yesterday afternoon.
The post Why the Select Harvests (ASX:SHV) share price is on watch appeared first on The Motley Fool Australia. –

farming asx share price represented by piles of almonds

The Select Harvests Limited (ASX: SHV) share price will be on watch this morning after the company released a market update late yesterday afternoon. At Monday’s market close, the almond producer’s shares finished the day at $6.11.

Why is the Select Harvests share price in focus?

The Select Harvest share price could be on the move following the company’s latest update on current market conditions.

According to its release, 50% of Select Harvests’ crop has so far been harvested. While Victoria and South Australia have experienced favourable weather, New South Wales has been impacted by heavy rains recently.

The company noted however that its open shell nonpareil variety harvest has been completed with minimal disruption. It stated that its affected product is the later harvested closed shell pollinator varieties.

Should weather remain calm, Select Harvests is hoping to complete the harvest within the next few weeks. Notably, the company anticipates no volume impact from the rain, and maintains its previous forecast of over 27,000 metric tonnes to be harvested.

The 50% of the crop that has been collected was delivered to the Carina West processing facility. At current, over 10% of the received crop has been processed.

Select Harvests revealed that it has orders for 20% of its forecast crop at $6.60 per kilo, but this does not reflect the total tool price.

The outlook for growing and processing costs are expected to remain flat year on year. The company advised water and energy prices appear positive along with tree health and bud development for the 2022 crop.

Market conditions

Select Harvests said that its United States industry has suffered extremely dry weather conditions and an uninterrupted pollination period. Industry experts are projecting that crops will be lower compared to last year’s harvest.

The Almond Board of California Position Report for February reported achieved crop receipts of 3.1 billion pounds, up 22% on last year. In addition, year-to-date shipments increased 16.2% with forward commitments up 50.5% on the prior corresponding period.

Across the pacific, the Almond Board of Australia Position Report for January recorded year-on-year exports down 1.6%, but up 9% for the same month last year. The South/Central Asia market saw growth of 37% when matched against last year to date.

Lastly, the company confirmed that both its Australian and United States processors are facing shipping delays. This is due to container shortages and COVID-19 lockdowns. Select Harvests believes that distribution channels will return to normal in future.

Foolish takeaway

The Select Harvests share price has lost more than 10% over the past 12 months but gained over 15% year to date. The company’s shares last hit a 52-week high of $7.98 in late May 2020.

Based on valuation grounds, Select Harvests has a market capitalisation of roughly $734.5 million, with about 120.2 million shares outstanding.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Select Harvests (ASX:SHV) share price is on watch appeared first on The Motley Fool Australia.

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