US Perspective—06.11.12
06/11/2012
www.themaxfieldreport.com
Last week saw big packer hides get off to a slow start as the majority of packers refrained from offering regular weight steers and appeared as if they were more focused on selling Jumbo steer hides and wet blue hides. However, by the middle of the week, when members of the trade were leaning towards the opinion that tanners’ insatiable appetite had been filled and that prices would soften, packers and traders experienced a decent round of interest. Popular opinion in the trade is that there were a moderate number of hides exchanging hands last week at no less than steady levels.
Trading levels experienced last week saw trading on HNS trade at levels of $88 (FOB) with unconfirmed rumours of sales as high as $89, while sales of HTS and BBS reflected trading levels of $87, after packers passed numerous bids at $86, while we are aware of sales on BS at levels of $85 and CBS at $84. Interest on cowhides last week was not as robust as big packer hides, leaving the trade with the sentiment at the end of last week that cowhide prices appeared a bit softer. At the end of the day, it appears that higher slaughter numbers, coupled with a decrease in interest on cowhides, attributed to cheaper offers of Brazilian wet blue hides, have some producers scrambling for sales. Trading levels last week appeared as if HNDC were struggling to trade at levels higher than $70 (FOB), while both HNC and HBC slipped at least a dollar from last week’s levels at $63 and $55 respectively.
Considering the strong export sales of the past couple of weeks, we do not expect much to change this week. It is well known that hide weights appear as if they are running heavier than levels of a year ago and with most packers well over-sold on regular weight production, those looking for seasonal weight-average hides may have a difficult time finding a seller willing to sell, regardless of the price. In the meantime, look for the slaughter of fed-cattle to follow their normal seasonal pattern and decrease as we move through the month, and this will only aid the efforts of packers to hold prices no worse than steady.
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