US Perspective—03.09.13
03/09/2013
www.themaxfieldreport.com
Interest on big packer hides slowed considerably at the end of last week. According to sources, there were still a decent number of buyers interested in buying hides; however, it appears that packers had sold enough hides and opportunities to buy at what appears to be the bottom of the market no longer existed. This allowed packers and traders an opportunity to take advantage of these “me too” buyers and resulted in several reports of trading at levels $1-$2 higher than the lowest reported trading levels earlier this week.
Sources overseas also report that interest slowed considerably as it appears the lion’s share of those interested in buying were able to conclude business this week. In regard to trading levels seen over the course of the week, sales on HTS ranged from a low of $90 delivered to a high of $93 delivered, while trading levels on BS were similar. Reports are calling trading levels on BBS as low as $95 delivered to as high as $99 delivered, while interest on HNS reflected levels as low as $98 to as high as $101 delivered.
Overall, popular opinion in the trade is that it is more than likely that packers liquidated a week of slaughter.
Prices have likely reached the bottom end of the trading range and the downward pressure on prices is likely to subside.
This week the trade will come together in Shanghai for the All China Leather Exhibition. We tend to suspect producers will be feeling good about their recent sales and expect them to be very vocal about their new and improved sold forward positions. We will be watching to see if there is any decent follow-up business over the course of the next two or three weeks, which we believe is needed as there are still plenty of pundits of the opinion that the leather business is not equal to levels of a year ago.
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