Recent South of Delta Transaction Priced at $411/AF

Nasdaq Veles California Water Index

(NQH2O) $341.73 -13.99 {-3.93%} as of May 21, 2025

Water Market Prices and Trading 5/12/2025 – 5/16/2025

Recent market activity includes one transaction each in the South & North of Delta regions (SOD/NOD)

• 5,000 AF of federal project water was transferred SOD between agricultural water districts for $411/AF. Prices for this transfer were negotiated while allocations were at 40% and represent the higher end of expected transaction values for 2025 spot market transfers.
• 360 AF of contract water was transferred NOD between urban water users for $61/AF. The price for this transaction is near the value of delivery costs and is reflective of the low demand in the NOD region this year.

Upcoming SOD transfers are expected to execute at $325/AF

• A handful of agricultural water districts are in negotiation to receive supplemental water supplies for peak irrigation season.
• Negotiated prices are currently $325/AF.
• Moving into June and July, additional supplemental supplies may be transferred.Historically, May transfer activity in the SOD market is low

Historically, May transfer activity in the SOD market is low

• An average of 5 transactions have occurred in May, with up to 17 transactions occurring in some years.
• Historic average unit prices range from a low of $51/AF in 2023 to a high of $1,275/AF in 2022.
• Average volumes range from 400 AF in 2024 to 13,000 AF in 2019.
• Counts of transactions vary with project allocations. 2018, an average year following a wet year, had 10 transactions. In 202,1 13 transfers occurred in the second consecutive year of drought.

Historical May Activity

Historically, the SOD spot market is active in June

• An average of 5 transactions have occurred each June, with historical market activity falling between 1 and 7 transactions. Similar to May, 2018 and 2022 have a higher number of transactions than typically observed.
• Prices continue to trend inversely with allocations to a larger degree than in May. Historic average prices range from $36/AF in 2023 to $1,530/AF in 2022, which is a wider range than observed in May.
• Average volumes range from 1,444 AF in 2021 to 14,610 AF in 2016. The average June transfer volume across all years is 4,282 AF, about 1,500 AF lower than the average from May.
• Market activity is trending below average so far in 2025. Participants may increase transfers in June but likely will still be below historic trading volumes.

Historical June Activity

Current Trading Trends – Surface Water

Volume Traded:

20,445 AF Traded YTD

19% of Average Historical Volume Traded YTD

Number of Transactions:

10 Transfers Completed YTD

Latest Transfer Prices South-of-Delta (SOD):

$411/AF

South-of-Delta (SOD) Market Outlook: Recent and upcoming spot market prices range from $325/AF to $411/AF. Large carryover supplies enable districts to not need to participate in the spot market this year. Upcoming transactions are primarily to meet supplemental water needs with prices at $325/AF.

North-of-Delta Market (NOD) Outlook: Water transfer activity is expected to be minimal as the NOD region has high capacity and allocations. A couple of transfers are in negotiation for later in the year with recent prices at $61/AF.

NOD-SOD Transfers Limited: Market participants are initiating discussions about potential transfers for 2025, including crop idling, reservoir release, and groundwater substitution transfers. Water transfer activity may increase in the summer when the through-Delta transfer window opens. Prices and trading volumes will depend on Delta conditions, reservoirs storage and project water allocations.

California Surface Water Markets

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