US Perspective—10.08.10
Market activity and analysis
The week ending July 30 ended with the steer market steady to firm and the Jacobsen Hide Index average for the week at $68.80, up $0.71 from the previous week. The index was just under $70 on the Friday, back to the price range seen at the beginning of July.
A very small amount of carryover business was reported on Monday, August 2 (only two trades), with prices relatively unchanged. Packer hides were on the upper end of the trading range and, not surprisingly, processor hides were on the lower. With a lot of hides sold at the end of the previous week, most people on Monday were expecting the steer market to hold steady to firm and for cows to remain steady. Several people were reporting that there were still a number of plump cows to move.
There was a little more activity in the hide market on Tuesday as buyers and sellers positioned themselves for the week’s business. As many had predicted, the packers were more aggressive on pricing and although offers were spotty, prices were reported from steady to higher on certain selections. Cows and bulls were in good supply and were more difficult to sell than steer hides.
Several suppliers noted some interest in bulls and cows but no business was confirmed on Tuesday. In general, suppliers were reporting inquiries and a few bids with prices still low. One source said that “the tanners have not received the memo yet that the market is firm”.
A small number of sales was reported on Tuesday with prices within the previous week’s trading range, but down slightly. HNH, HNS (heavy), and HNC were down a dollar at $63, $72.50 and $47, respectively. HTS sold for $72 and light HNS at $73 with the Texas down and the natives up on average. Trading volume was too small to indicate market direction one way or another.
By midweek there had still not been much movement in the US hide market. Some people reported seeing offers for HTS C&F China at $82, but this did not prompt much interest with the $80 barrier continuing to be in play. Several bids were reported several dollars below this level, but did not motivate sellers. In general, the mood on Wednesday in the marketplace was standoffish and cautious, with most people waiting to see which way, if any, the market would break.
There was a moderate volume of trades on Wednesday with prices edging down but within the previous week’s trading range. The steer market appeared to being holding steady, while the cow and bull market could have been characterised as “barely steady”.
The market was relatively quiet on Thursday with a lower-than-normal number of sales reported for a Thursday. Steer prices were basically steady while cow selections were mixed with prices both up and down. Two notable trades included a new high for HNS at $75 and for NBC at $38. Thursday’s HNS spread average was $73.50 and NBC had a spread of $36, both up a dollar. Most people indicated that trade volume was down with orders limited to a few loads here and there. One supplier, however, reported selling a large number of hides.
There was no Jacobsen report on Friday.
Stronger export sales
Thursday’s USDA export sales report for the week ending July 29 looked considerably stronger than the previous four-week whole hide and combined hide and wet blue sales reports. For the week, combined whole hide and wet blue sales were 683,700 compared with the previous four-week average of 395,825. This probably explains why the mood of suppliers was so upbeat last Friday.
Shipments during the previous week were close to the year’s norm with combined whole hide and wet blues totalling 597,400 compared with the year’s average of 592,427. For comparison, slaughter for the same week was 654,000.
On a year-to-date basis, cattle slaughter this year through week 30 is 19,303,000 head, combined whole hide and wet blue sales 16,692,595, and combined shipments 17,772,000. Combined slaughter this year exceeds shipments by 1,531,000 or 51,033 average pieces per week, and exceeds sales by 2,610,405 or 87,014 average pieces per week.
