US Perspective—20.09.11
20/09/2011
www.themaxfieldreport.com
Members of the big packer trade appear to share the opinion there was quite a bit of interest expressed this week from tanners, albeit at levels well below the published asking prices of packers. Reports from various members of the trade report a few of the packers were laying claims to having a strong week of sales. Claims by one packer is they sold approximately 100 containers of wet-salted hides, while reports claim another sold in excess of 200 containers of wet-blue hides. Overall, it appears packers conducted the majority of the trading this week, while there were some isolated reports of a few traders becoming a bit more aggressive and believed to be selling the market short. As of this writing, popular opinion of the trade is that it is very likely packers sold in excess of the slaughter this week.
Sources share trading levels last week saw steer prices falling short of the $90 delivered market of the previous week, with HTS/BBS trading around the $88-$89level delivered to Asia, and BS selling around $87-$88 delivered level. Trading reported today includes sales on regular weight packer BS at $81, while we have a couple sales on CBS with lighter weights at $78 and heavier weights at $79. We also have a sale on HNH reported at $74, while we also have lighter weight HNS reported at $82. The other trading we have reported is packer sales of regular weight HTs at $82, while we also have a sale on Jumbo HTS at $85.
We are not certain that one decent week of sales will be enough for sellers to stabilise the market. However, if we see some decent follow-through interest next week, we could buy into the argument that we may have found a trading plateau.
Something to keep an eye on are increasing reports of tanners in Asia having more and more difficulties opening up letters of credit in a timely fashion. Speculation is this problem is only likely to increase moving forward as interest rates have been raised three times this year and with Chinese banks tightening lending requirements, coupled with slow payments from footwear manufacturers, this could be a larger problem in the fourth quarter.
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