US Perspective - 27.03.11
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Popular opinion of the big packer trade is that for the most part buyers and sellers struggled to agree on prices last week. Packers were reported to have started the week with aspirations of obtaining $90 or better for steer hides, but quickly realised these were not realistic levels and adjusted their asking prices to $88-$89 delivered depending on the selection and destination.
Meanwhile, buyers who were willing to pay levels of $88-$89 delivered last week quickly readjusted their ideas on news that packers were adjusting their asking ideas. By mid-week, buyers were aggressively bidding $85-$86 delivered and these levels failed to catch the interest on packers.
The above lead sources to believe that it is very likely packers did not clear even a shorter week of slaughter last week (slaughter numbers were barely over 600,000). However, it should be noted that with so many people travelling Asia there is always the chance there was some direct or courtesy business concluded under the cover of darkness. It will be interesting to see if we have a second consecutive week of anaemic export sales numbers.
In the meantime, members of the cowhide trade report an uneventful week of trading, very similar to reports shared in the big packer trade. Sources report that sellers started the week attempting to hold prices steady with the last reported trading levels. However, by mid-week, it was clear that if sellers were to move any hides last week they would have to be willing to negotiate prices, and sellers hoped that adjusting to their ideas to bidding levels at the end of last week would help “jump-start” business.
Unfortunately, for sellers, buyers upon hearing of sellers adjusting their asking prices lower, quickly reduced their ideas and for the most part it created a stalemate in regards to trading. The sentiment of the trade is that only a minimum number of hides exchanged hands last week and it is likely producers did not liquidate their production in spite of the number of cows coming to slaughter following seasonal numbers and declining.
THE LOOK AHEAD
The trade has gathered in Hong Kong for the APLF and it will be interesting to get a chance to sit down with packers, processors and traders in order to gauge the success of their trips and hear their reports on inventories of tanners in general and how busy tanners appear. In the meantime, it will be interesting to sit with tanners and hear their reports as we tend to suspect there are more than a few sellers who were looking to sell hides the past week to ten days.
Meanwhile, in the past, those looking to sell hides during the show usually tend to be disappointed. However, if last week’s sales are as anaemic as many pundits have been calling, then we would tend to suspect that we very well could see a nice round of business take place sometime in the next week or so as we agree with opinions there is still demand that has not been filled.
