US Perspective—17.09.13
17/09/2013
www.themaxfieldreport.com
Sales of big packer hides slowed considerably last week; compared to the past two or three weeks; however, the consensus in the trade is that this was by design of the packers. The couple of weeks leading up to the Shanghai Fair and during the week of Shanghai, packers took advantage to move a decent number of hides (supported by the USDA Export Sales). The decent sales allowed packers to mend their sold-forward positions and with positions improved and slaughter numbers drifting lower, many of the packers did not officially offer hides last week.
It’s worth noting that although packers were not officially offering hides, all appeared willing to consider unsolicited bids; however, the common theme amongst packers was that they all appeared to be working towards improving upon their last traded levels.
The few buyers chasing the market with “me too” interest, begrudgingly had to agree to pay more money for the hides they bought last week. Interest in HNS allowed those packers with hides to sell to obtain as $95-$96, while packers willing to sell BBS were able to obtain as much as $92 in limited quantities. Meanwhile, trading on HTS reflected levels ranging from $93-$96 delivered depending on weight averages and ports, while sales on BS were reported at levels of $94-$95 delivered.
Looking ahead, this week is likely to mirror last week. We tend to believe that there is likely not to be many hides offered, with sellers looking to obtain more money for the hides that buyers are interested in buying.
The next couple of weeks will see Asian tanners out of the office due to autumn holidays and with sellers leaning towards pushing prices higher, it is likely we will see tanners try to use their holidays as a reason not to buy. Meanwhile, we look for sellers to continue to boast about how many hides they have sold; however, one needs to remember for every hide sold, there is a hide bought and we tend to suspect that many buyers at least for the near-term have covered their immediate needs.
Therefore, we look for a stalemate again this week and those looking for bargains will not find sellers willing to accommodate them. We are not certain as to how much higher producers can push prices.
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