US Perspective - 19.03.13
19/03/2013
www.themaxfieldreport.com
THE COMMENTARY
Popular opinion of trade is that packers had a moderately successful week of trading last week, with prices inching higher, and it was generally agreed that packers sold their production. Overall, interest appeared led once again by Chinese tanners, while Korean and Taiwanese tanners followed to a lesser degree. There were reports again out of Korea of additional tanners reducing soaking levels, insisting current trading levels are not allowing them to operate profitably.
Last week saw modest interest on cowhides. Sellers laid claims to selling a decent amount of product and it is generally believed that producers sold a week’s worth of production.
Expectations of the trade is that offer lists by those travelling are likely to be no worse than steady and we would not be surprised if some producers did not test the waters with higher asking prices. Mean-while, as usual, we would be surprised if those left in the States offered hides to the public.
THE LOOK AHEAD
Looking ahead to what this week is likely to hold, the remainder of the trade with intentions of heading to the APLF will be departing through the course of this week. Sellers are hoping that some of these travellers will have some type of special offerings for them: however, considering the lower slaughter levels, coupled with the vast majority of sellers enjoying comfortable sold-forward positions, it does not appear from our vantage point that prices will soften in the near term.
In the meantime, with numerous travellers crisscrossing Asia this week, it will certainly be interesting to see if producers can parlay consistent, steady demand out of China into even higher prices before members of the trade return to their offices following the show.
THE SLAUGHTER
Monday’s cattle slaughter checks in at 119,000 head. This is a thousand head less compared to the same day last week, while it is four thousand head less than the same day last year. Worth noting, the four-week running slaughter for this week is 619,000 head, while we saw only 602,000 head slaughtered this week last year. As for our slaughter guess this week, some packers saw their mar-gins move back into the black (barely) and we tend to believe that we will see at least as many head slaughtered as last week and we will start our weekly guess at 607,000 head.
Last week’s cow / bull slaughter checks in at 137,000 head. This is a 4,000 head improvement ver-sus the week prior, and 9,000 head higher than the same week last year. Year-to-date, the cow slaughter stands at 1,457,000 head and this is 10,000 head or 0.68% lower than last year’s pace. As for what we look for this week’s cow slaughter, we tend to suspect that we will see slaughter levels follow their seasonal level and likely to pull back a bit this week, and look for something closer to 127,000 head.
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