US Perspective - 24.07.12
24/07/2012
www.themaxfieldreport.com
Reports from various members of the big packer trade are claiming packers were successful in their efforts to push prices of wet-salted hides higher this week.
Packers entered the week with only minimal offerings, especially lacking offers of tanners’ more favourite selections. However, we understand that buyers appeared anxious to buy early in the week; we tend to believe the majority of packers found a few more hides to offer, especially at the higher trading levels. What we found interesting were comments that interest this week appeared to be broad based with tanners from several different parts of the world looking to buy hides. We also understand that interest from traders was decent this week as well.
By the time all of the activity was concluded, we know of trading levels on HNS as high as $92.50 delivered, while HTS and BBS sold as high as $91.50-$92 delivered. We also heard of sales on BS as high as $91 delivered. Overall, the consensus in the trade is that prices ended the week up better than a dollar a hide, while it appears opinions are divided as to exactly how many hides exchanged hands this week, especially considering the fact the vast majority of packers insist they are well sold forward and had only limited quantities of hides they could sell.
We were able to muster a respectable amount of trading today led by reports of heavier weight BBS trading in a range of $83-$85, while we had a couple of sales on BS with regular weight packer material selling as high as $83 and Jumbos trading hands at $86. We also had a couple of sales on HNS as we had lighter weights exchanging hands at $85, while sales of heavier weight material was reflecting levels of $85.50. The only other trade we have to share is a sale on regular weight packer HTS as we have packers laying claims to sales today as high as $84.
Reports from sources overseas share that attempts to sell HNDC as high as $76-$77 delivered appear as if they did not catch the interest of buyers and by the end of the week we know of multiple sales in the neighbourhood closer to $74 delivered. Meanwhile, we know of attempts from buyers to bid HNC under $65 delivered were met with stern resistance from sellers and by late in the week buyers begrudgingly paid as much as $69 delivered for product.
In regard to HBC, we know of bids early in the week at levels of $55 delivered which were refused, and towards the end of the week, we are told buyers improved their ideas to as high as $60 delivered. Trading levels reported today reflect sales of processor steers at higher levels with BS bringing levels as high as $80 and sales of HTS at $81. Other trading is reflecting HNDC sold in decent volumes at $69, while sales of HNC were repeated today at $62. The other trading reported today is a couple of sales on bull hides as we have trading on NB at $68 and BB checking in at $61.
The question we have looking ahead to this coming week is considering the amount of interest that sellers were not able to book this week, it is very likely that prices will remain no worse than steady for the next couple of weeks, if not pushed incrementally higher by desperate buyers. In the meantime, perhaps those needing to buy hides should defer their attention from wet-salted hides and perhaps look towards buying wet-blue hides. We continue to hear from sources that there are more than ample offers by those producing wet-blue and popular opinion is that those with money and able to accept volume may have the opportunity to negotiate price.
Also worth keeping an eye on are slaughter levels. This week’s slaughter at 654,000 head is the highest of the year and is equal to the same number we slaughtered this week a year ago. The large slaughter comes as a bit of a surprise, as packers were insisting to us as late as the middle of this week that they expected slaughter levels to fall below 640,000 head this week. Looking ahead to next week, one would think it is rather likely the vast majority of sellers will not offer next week, especially considering the sold forward positions most are claiming. However, if sellers should offer next week, we would be shocked if they did not raise their asking prices.
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