The US perspective - 29.10.13
29/10/2013
www.themaxfieldreport.com
Packer prices firmed further last week, in spite of the fact packers only offered a limited number of hides. Popular opinion of the trade was that hides were lightly traded last week; however, the few hides that did exchange hands sold at levels $1-$2 higher than trading levels of the week prior. In fact, when the USDA Export Report come out illustrating we had another week of sales with more than 700,000 hides sold for the week ending October 3, many sellers decided they had sold enough and pulled the few remaining hides they had for sale.
Sales last week for the most part consisted of jumbo and super-jumbo steer hides with sales on HTS ranging from $115-$118 delivered depending on weight average and origin, while we heard a few isolated sales on BBS as high as $108 delivered and regular weight HTS as high as $105 delivered. In addition, producers of wet-blue continue to lay claims to enjoying decent sales the past several weeks as it appears packers unwilling to sell additional volumes of wet-salted hides has forced the hands of buyers and now have no choice but to consider offerings of wet-blue hides.
Members of the cowhide trade report an extremely busy week of interest with several sources sharing that they enjoyed tremendous interest last week from several different directions. Overall, popular opinion of the trade is that it is likely producers sold at least a week’s worth of production, while trading levels on items sold were $1-$2 higher depending on the selections.
Sources continue to report that HNDC appear to be drawing the mast interest with buyers willing to pay levels of $94 delivered. Meanwhile, interest on HNC was decent as well with interest pushing prices higher, while there were enough buyers looking for HBC that it also allowed for higher trading levels. Meanwhile, the number of cows in the slaughter mix continues to fall below levels of a year ago with numbers down 15,000 head or roughly 15% last week with expectations this trend is likely to continue.
THE LOOK AHEAD
As to what we expect this week, sellers remain in full control of the market and buyers looking for coverage are going to need to prepare themselves to be ready for even higher prices. Overall, sellers collectively as a group possess one of the strongest sold forward positions since earlier this year and speculation by the trade is that many sellers are now sold out for the remainder of the calendar year.
What will be worth monitoring in our opinion is that interest / demand in Europe has slowed considerably since the Bologna Fair. Some pundits insist this is because buyers have filled their appetites, while others insist that the lack of interest is attributed to prices simply being too high and it will be interesting to see how this plays out.
Meanwhile, with steer prices in the US approaching levels of $100 FOB again, there are starting to be signs of demand slowing down a bit. However, with slaughter numbers expected to struggle to be much more than 600,000 head on a weekly basis as we move into November it will be interesting to see how the dynamics of supply and demand play out the remainder of the year.
Share this story:
