US Perspective - 28.08.12
28/08/2012
www.themaxfieldreport.com
Reports from various members of the big packer trade claim last week was a relatively quiet week of trading as it appears buyers, who are sensing a slight undertone to the market, are uninterested in bidding. Sources share that those buyers who expressed interest this week appeared as if they were only willing to bid limited volumes while price ideas were easily a couple of dollars below the steady asking prices of packers.
Ideas on steers at $92-$93 delivered appear as if they are now unobtainable. We have encountered numerous rumours insisting there are packers and traders who appear as if they are more than willing to negotiate prices. In addition, several sources insist there are more than a few sellers who were attempting to trade hides at prices under the previous week’s trading levels.
At the end of the day, it appears the consensus of the trade is that it is unlikely packers were able to liquidate their slaughter this week, while it appears popular opinion of the trade is that the few hides that exchanged hands this week did so at slightly lower levels than last week.
In the meantime, we had a moderate amount of trading reported as we have regular weight packer BS checking in at $83, while sales of Jumbos reflect $90. Other trading includes lightweight CBS at $80 and heavier weights at $81, while we have a couple of sales on HNS with lighter weights at $85 and heavier weights at $86. The only other trading was a couple of sales on HTS with packer regular weight material at $84 and Jumbos at $91.
As we approached the end of another week of trading, we were only a week and a half removed from the start of the All China Leather Exhibition in Shanghai. We are seeing signs that the market is exhibiting indications that prices are on the verge of a transition. In fact, in our humble opinion, for the first time in several weeks, it appears as if buyers might finally have momentum moving slowly in their direction.
Looking ahead to what we expect this coming week, the vast majority of producers will have representatives travelling Asia and this should translate to few offers to the public, if any. In the meantime, the recent surge in slaughter levels and forecast that next week is likely to be at least equal to this week is no doubt going to challenge claims by sellers that they possess strong sold forward positions.
Reports about tanners who are much slower opening letters of credit suggest this is a growing problem. We have heard rumours that some sellers have had to redirect hides, if not re-sell them in order to keep shipments moving. Sources share that payments from shoemakers continue to come in late and this is only compounding the problem. What we will be interested in hearing are reports from those travelling as to their perceptions of tanners’ inventories of raw stock, as the opinion of some pundits is that for the most part, Chinese tanners are covered and Korean tanners are short of inventory. In the meantime, tanners continue to insist that their order books for September and October are not as populated as last year and those travelling will be looking to verify these claims.
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