With the end of the 2006 harvest in California roughly three weeks away and most grapes "committed," an estimated 100 to 150 thousand tons of grapes have yet to find buyers, a challenging scenario for many growers, Joe Ciatti, chairman and CEO of Vintage Wine Trust and chief of the Joseph W Ciatti wine brokerage company said last week.

Ciatti was speaking during the 15th annual Wine Industry Financial Symposium in Napa, and much of his talk focused on the recent transactions by the real estate investment trust he manages. He noted, however, that if estimates made by state statisticians prove to be correct, 3.2 million tons of wine grapes will be crushed in California this year.

"The good news is that is 600,000 tons less than we crushed in 2005, which gives us a breather," Ciatti said. "The bad news is it's the third largest crush in our history if it's true."

Ciatti said it looks like most grapes used for white wines have a home, but that some red varieties, particularly Cabernet Sauvingon and Merlot, are "long."

"At this moment, just about all the fruit's been committed, so my feelings are that on the white side, after this crush, we're going to be in pretty good balance, much better balance than we were last year at this time," Ciatti said. "We're just getting the reds in the '06 crush. Merlot, Cabernet, and Syrah, those three red grapes are long, not only in Fresno and Lodi, but, in Mendocino, on the Central Coast, in Paso Robles, etcetera. In Napa and Sonoma, not all grapes have been committed."

Following a few years of oversupply and a sales slowdown and "9-11" hangover, California had a relatively small crush in 2004, and with about 521 million gallons of California wine reaching consumers that year, the market was short by about 48 million gallons, which helped stabilize the bulk wine market.

In 2005, however, the harvest was up 35 percent from the previous year, and tanks were overflowing such that there was an estimated oversupply of 631,000 tons or 107 million gallons. Even considering that the market was short by about 285,000 tons from the previous year, it still left California with about 350,000 tons too much.

Many buyers, have thus been conservative about grape purchases since last year, Ciatti said. "So what's going to happen?" he asked rhetorically. "In about three weeks we'll know."