US Perspective - 06.09.11
US Perspective – 06.09.11
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Activity in the big packer market slowed towards the end of the week. We can blame some of the inactivity for the fact that there were very few members of the trade still in the office on Friday as the trade will gather on September 6-8 in Shanghai China for the Asia Pacific Fair.
It appears as if sellers were able to duplicate their last traded levels. The sentiment of the trade is there were a fair number of hides trading hands this week, while we tend to suspect packers were successful liquidating the slaughter this week, following a miserable week of sales last week. However, with several of the major players travelling in Asia this week, it is difficult to obtain an accurate assessment on trading volumes.
The consensus of the trade is that trading levels were down fifty cents to a dollar this week, depending on the selection. Meanwhile, reports from sources overseas claim that ideas from tanners at $90 delivered or higher are long gone. We have also heard reports that buyers are forecasting that prices are likely to remain under pressure and looking for prices to challenge $85 delivered in the near future.
The TMR Big Packer Weekly Index comes in a seventy-five cents lower than last week checking in today at $79.95. Worth noting is this is the first time the index has dropped below the eighty dollar level since the week ending January 30 (twenty-nine weeks).
Reports from the cow and bull hide trade claim that producers experienced a difficult week of trading. There were numerous rumours floating through the trade this week accusing some of the various processors of pressing to sell large inventories of unsold hides, while we heard reports that even the most bullish of the processors were busy working the phones towards the end of the week checking the trade to see if they had any bids.
Also worth noting is that it is appearing as if the “bloom” might be finally coming off HNDC. Sellers have enjoyed decent sales all summer long and have been able to name their price. However, we continue to hear numerous claims that although there may be one or two sellers still able to obtain their last traded levels in minimal volumes with a lot of effort, the vast majority of sellers are willing to negotiate prices with perspective buyers.
Popular opinion in the trade is that processors likely did not have as successful week of trading as big packers.
There is no question producers were successful liquidating hides this week; however, the big question is did sellers move enough hides in order to stabilize prices heading into the Shanghai Show.
In the meantime, there continue to be plenty of rumours swirling around a couple of the major producers accusing them of aggressively marketing hides this past week at levels below published trading levels, and we will have to see if they sold enough hides in order to get out of the way of other sellers. Meanwhile, we continue to hear a few isolated rumours about tanners delaying shipments of their outstanding orders. We suspect this might have to do with some of the sellers mentioned above who appear desperate for sales, liquidating product for prompt shipment, resulting in tanners having to delay other orders.
Looking ahead to next week, we will welcome the opportunity to visit with all of the members of the trade who have travelled prior to the fair and listen to their comments as to tanner’s inventories of raw stock and soaking levels. It will also be interesting to visit with tanners to see what they were offered the past week and see which of the sellers are sold as strongly as they are advertising.
