US Perspective—26.02.13
26/02/2013
www.themaxfieldreport.com
Reports from members of the cowhide trade are claiming a decent week of interest as well as trading. According to various sources, nearly all producers of cowhides report decent interest for last week and some producers were able to parlay this better interest into higher trading levels, especially on HNDC and HNC.
What we find interesting and certainly worth monitoring is where cows are currently being slaughtered. According to sources in the south-west part of the US, many cow slaughter operations there are down to slaughtering only two or three days per week. As a comparison, slaughter numbers in the Midwest and East Coast part of the US are also down, but not to the same extent. However, on a positive note, we understand the western part of the US is not experiencing any noticeable shortage of cows and slaughter numbers there remain decent. We do have a couple of sales to report from business pending over the weekend as we have sales of processor steers checking in at steady levels with HTS at $91 and BS at $90.
Looking ahead to what we expect for this week, we doubt we will see a lot of change in the market. We look for packers to stand behind a significantly reduced slaughter as a reason not to sell. Meanwhile, it is also important to remember we are now only four weeks away from the start of the APLF Fair in Hong Kong (March 25-27) and that means it is likely we will have members of the trade travelling in parts of Asia in the next couple of weeks. Usually, the time leading up to APLF would be a busy time for traders who would want to ensure that they had hides to offer their customers when travelling prior to the show. However, considering that steer prices are now in excess of $100 delivered and at all-time record levels, we would tend to suspect traders might be a bit more cautious this year.
? ? ?In our opinion, tanners will want to keep an eye on the US market as last week’s major snowstorm impacted the lion’s share of major feedlots in the US, leaving cattle pens full of snow which will melt and lead to mud and manure problems. Meanwhile, we have heard that tanners have been meeting much more resistance when approaching the major brands for price increases on new leather orders, and especially some of the larger luxury brands. This is leading to unconfirmed rumours that some tanners will be decreasing soaking levels for March and April; this too could be tanners “jockeying” for position with those selling hides in order to try and move hide prices lower.
There have been unconfirmed rumours of some of the packers with a few “special offers” on hard-to-sell selections towards the end of last week and this is something worth keeping an eye on as well. However, at the end of the day, we tend to believe that with slaughter numbers so low and the appearance that packers possess better-than-average sold-forward positions, it is unlikely we will see much of a change in prices this week.
Share this story:
