US Perspective—02.04.13
02/04/2013
www.themaxfieldreport.com
Most members of the US trade have returned home following the APLF exhibition in Hong Kong. When speaking with various members of the trade who have travelled over the last couple of weeks, it appears in general that the exhibition was a success for most and we have yet to encounter anyone who was disappointed that they took the time to travel.
As far as business last week, sellers for both big packer hides and cowhides saw interest develop right at the start of APLF (March 25) and at a decent pace, and according to sources, interest continued throughout the duration of the fair. In fact, some members of the trade referred to interest as a “feeding frenzy” and this hectic pace allowed sellers to improve their trading levels by more than $2 per hide last week.
In terms of volume, we are of the opinion that sellers enjoyed a decent week of sales and likely cleared at least a week’s worth of production. However, considering slaughter levels were struggling to clear 600,000 head last week, the volume of hides sold last week is certainly not going to set any records. In the meantime, reports from overseas claim tanners are obviously frustrated by the higher trading levels and continue to insist that they are not able to operate profitably. What is interesting is that in spite of these claims, those who travelled in Asia prior to the APLF show are sharing that the tanners they visited exhibited no real signs of running at reduced volumes. Meanwhile, in regards to prices, ideas on HTS as high as $106 delivered appear commonplace, while a dollar more than this level is where buyers would like to buy BBS and a dollar lower where they value BS. In addition, we heard some rumblings that ideas on HNS reached as high as $108 delivered last week, while ideas on Jumbo HTS were reaching levels as high as $117 delivered according to some sources.
Prices continue to establish new all-time records on a weekly basis. Popular opinion in the trade is that if sellers offer this week it will be at even higher prices, so tanners might tend to think the hide market in general is an April Fool’s joke gone terribly wrong. ??
Looking ahead to what we expect for this week, we tend to suspect offers lists might be a bit less populated than in the past couple of weeks, attributed to producers wanting to ensure they had at least something to offer their customers when travelling. Unfortunately for producers, interest was by far better than most were anticipating; and we tend to believe that some producers may have sold a few more hides than they wanted and inadvertently extended their sold-forward positions. In the meantime, early forecast for April’s slaughter is that it will continue to struggle to exceed 600,000 head on a weekly basis. If this should come to fruition, it would be slightly more than 100,000 head lower for the month, or approximately a day’s worth of slaughter. This is why we believe that if we are to see any real change in the market, it is likely to be that of hide prices moving even higher.
Share this story:
