US Perspective - 04.10.11
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Reports from members of the big packer trade are claiming a difficult week of trading, complicated by a general lack of offers from packers, coupled with ideas from buyers that are well below the last established trading levels. Meanwhile, we have confirmed reports from sources sharing that their attempts to bid packers this week at levels below $82 FOB failed this week, while there continue to be rumours swirling through the trade accusing some of the various packers of actively pursuing direct business with tanners at levels reported to be at $88 delivered and possibly lower.
Overall, popular opinion of the trade is that this was not a busy week of trading, and it is likely we will see yet another week where packers fail to liquidate their weekly slaughter – which would be no small challenge this week considering the slaughter was the fourth largest of the year. Meanwhile the sentiment of the trade is that the few hides that did exchange hands did so at steady to slightly lower levels, depending on the packers and the selection.
We were able to round up a few isolated reports of trading; however, the number of trades reported is a far cry from a usual last day of the week. Trading reported today includes a couple of sales on CBS with lighter weights selling at $77 and heavier weight production trading hands at $78. The only other trading was a couple of sales of heifers as we have HNH at $73.50 and HBH at $70.
Reports from members of the cow hide trade claim that it appears the extremely large cow slaughter of the past few weeks is taking a toll on sellers and appears the “wind is out of the sails” of many sellers. Several sources shared that trading this week was difficult as sellers were holding on to dreams of keeping prices steady, while the ideas of buyers willing to buy this week were dollars below the last established trading levels.
The sentiment of the trade is that it is highly unlikely producers cleared their production this week, leading to speculation we will see offers lists next week fairly populated. In the meantime, as far as trading levels, we are of the opinion there really were not enough hides traded in order to establish a market; however, we tend to suspect the few hides that exchanged hands were unlikely to be sold at steady levels and more than likely sold at prices lower than levels on our price guide.
