US Perspective—14.09.10
14/09/2010
Courtesy of www.thejacobsen.com
Buyers at the All China Leather Exhibition, ACLE, (September 1–3) sensed some softness in the hide market and, to a large extent, choose to hold off a little longer hoping to buy lower. A couple of people commented that they were disappointed with business generated at the show, but others took it more in their stride and reflected that business volumes generated at leather fairs are less important with modern communications. On the up side, some traders report they had “a busy week selling a good number of hides”.
By the end of last week the tone in the market in the US continued to be standoffish with slight pressure on the downside, but a number of folks were thinking it should trade in a tight range with little risk of dropping significantly. To characterise the mood of the market, one pundit called it “quite a wrestling match”. Meanwhile, one packer indicated they intend to hold prices steady and see where things go from here.
There were a small number of sales reported with prices mixed. HTS and BS were up, selling as high as $71 and $70. On the down end, they traded for $69 and $67 respectively while NHNDC traded at $44.
The hide market wrapped up the week on a high note with a large number of packer and a fair number of processor sales. Prices at the end of the week were steady to firm after giving up a couple dollars in recent weeks. The Jacobsen Hide Index ended at $67.95, up $0.80 from the previous Friday. As expected, buyers showed more interest if prices were low but one source said they could have sold all the packer HTS at $71. The cow market was also steady and a number of native and branded selections sold with prices within the week’s trading range but up slightly from last week. Once again, NHNDC had a large spread between packer and processor hides.
For week ending September 2, US export hides and wet blue sales were off from both the year’s weekly average and the previous week’s figures. During the week, which ended at the midpoint of the All China Leather Exhibition, combined whole hide and wet blue sales totalled 513,800 and shipments 577,000. By comparison, average weekly year-to-date combined sales are 560,394 and shipments, 594,840. In the previous week, sales were 604,500 and shipments 644,700. A number of people indicated last week that they had sold a lot of hides at the end of ACLE. Due to the USDA’s Thursday cut-off, these sales will likely show up next week.
The three year-to-date comparison through week 35 shows this year’s slaughter at 22.6 million, 1.5% ahead of last year’s kill. Meanwhile, combined total whole hide and wet blue sales at 19.6 million are 11.2% behind 2009 and shipments at 20.8 million are 9.25% behind.
In the market last week resolve spread among US hide suppliers to halt any further declines in prices. Some offers this week reflect this with noticeably limited selections available and steady prices. In addition, an increasing number of traders were “talking up” the market.
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