US Perspective—23.11.10
23/11/2010
Courtesy of www.thejacobsen.com
The hide market ended the week on a strong footing with hide prices firm and HTS trading at around the $74 level. Some people noted limited trades sold up around $0.50 from last week’s levels. The general tone on the steer market leaned toward the bullish side. Cowhides were also firm with prices steady to up with one supplier of premium cows indicating getting a dollar higher.
Some people saw lower than normal sales this week; however, several indicated business was good, commenting that they sold all they needed. There is speculation that prices will be pushed some next week, but tanners will be resistant. There was one new high for dairy steers sold at $80.
Slaughter this week is estimated to be 676,000 head, up 15,000 from last week’s estimated kill and up 41,000 from the same period last year when it was 635,000. Earlier in the week, the Urner Barry poll of industry respondents forecast the average estimated slaughter for this week to be 654,176.
This week’s US Department of Agriculture sales report for week ending November 11 continues to highlight larger-than-normal sales and exports for hides and wet blue. For the week, which had a slaughter of 661,000, combined export sales were 754,800 and shipments were 660,000. The sales numbers include 6,300 wet blue pieces scheduled for 2011 shipment. In eight of the past nine weeks, combined sales have been significantly above the year’s weekly average. A number of producers have reported good business in the past several weeks and these numbers are clearly supporting their claims.
Another sign of strong demand is this year’s outstanding hide sales. Outstanding sales are the total outstanding export sales contracts that have not been shipped at a given time. Year-to-date outstanding sales for whole hides stand at nearly 3.2 million compared to 4.68 last year—a 32% reduction. Last week’s outstanding cured hide sales were the lowest levels for the past five years with 2005 the closest at 3.77 million. It should be noted that over the past couple years some of the outstanding sales numbers were more than likely inflated due to old or questionable contracts from the market meltdown in 2008–09.
This year through week 45, the numbers for slaughter, sales and shipments are 29,258,848; 26,319,495 and 27,117,900. The numbers for the same week in 2009 were 28,586,602; 27,600,200 and 28,360,400. Those for 2008 were 29,535,787; 27,153,900 and 28,474,100.
Prompted by good leather business in the shoe sector, good sales levels over the past several weeks have landed producers in well sold positions. Offer lists so far are reflecting this and have been limited with some suppliers not offering any hides at all.
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