US Perspective–10.05.11
10/05/2011
Courtesy of www.thejacobsen.com
The volatility this week in the commodity markets seemed to spill over into the hide markets as both experienced significant drops. On Thursday, oil prices fell nearly $10 per barrel or 9%, silver lost nearly 8%, and gold dropped 2.3%. The hide market this week also saw prices drop; however, the pace was less severe. For instance, the Jacobsen Hide index on Thursday (week to date) was $82.17, down $1.81 or 2.15% percent from the previous week.
The market continued to be tested at the end of the week with buyers and sellers proudly pulling out their best deal for reporting, picking up spreads in a number of selections. In general, the week ended with prices on steer hides down $1–$2 and the spreads flattening between steer selections including natives, butts, and Texas. Several sources confirmed that a fairly large number of hides were sold this week and the majority of packer steer hides sold for $90 C&F Asia. Depending on shipping point and destination, this would bring back FOB $82 to $83.
Last week’s US export sales for week ending April 28 were 488,900 combined whole hides and wet blue sales. This number compares to the average sales of 547,000 the previous week and an average 560,250 through week 17. It is now nine consecutive weeks when export sales are below the year’s weekly averages, which is likely a major factor in today’s softer market tone. Wet blue and hide sales this year total 1,084,454, behind the same time a year ago by 56,231 hides.
Wet blue sales last week at 76,500 were considerably down from the prior week’s 237,600. Vietnam was the biggest destination receiving 19,800 whole hides, followed by Thailand with 19,200, and China with 15,600 pieces. The year-to-date average weekly wet blue sales were 122,440 compared to the 135,950 average for the same time last year.
Combined blue and hide shipments last week totalled 646,100, surpassing the year’s weekly trend of 597,029. For comparison, slaughter the same week is 619,000 and the year-to-date average is 637,791. For the same period in 2010, the average weekly slaughter was 635,102 and in 2009 it was 620,101, trending this year’s kills very close to 2010 and 2.85% above 2009.
The figures for slaughter, sales and shipments of hides and wet blue through week 17 (April 28 this year) are as follows. In 2009, slaughter, sales and shipments were 10,541,714; 10,862,700, and 10,316,000 respectively. The comparative figures for 2010 were 10,796,742; 9,580,495 and 9,802,600. The figures for 2011 are 10,844,454; 9,524,264 and 10,164,800.
The Chinese markets reopened after the holidays with the Customs investigations still ongoing with one or more northern big tanners involved. The market tone carries a degree of uncertainty with both hide producers and consumers trying to understand where and when it will finally settle.
Slaughter for last week was expected to pick up from the previous week’s low of 615,000. Urner Barry’s poll of industry participants’ average guesstimate for the week is 637,167. Slaughter for the same period last year was 675,503. A couple Midwest packers today are forecasting the week’s kill to be between 640,000 and 650,000 head.
US sales of cars and trucks saw increases of 18.3% in April from a year ago and 19.9% calendar year to date.
Share this story:
