US perspective - 3.12.13
03/12/2013
www.themaxfieldreport.com
Last week was not a very active week of trading in the big packer trade. According to various reports, several of the packers had offer lists that were noticeably more populated than the past several weeks and even more intriguing was the fact that some packers were actually offering regular weight steer hides for the first time in a couple of months.
In our opinion, offering more hides than they had in nearly two months could not have come at a worse time for packers. We believe that a combination of the Thanksgiving Holiday, increased offer lists, asking prices equivalent to all-time record levels, coupled with a general lack of sales the past few weeks led up to what many members of the trade are claiming is a little softer market by the end of the week last week.
Overall, popular opinion of the trade is that it is unlikely that packers sold a week’s worth of production last week as the majority of the packers were reluctant to consider prices under their asking levels. However, the few packers who were willing to negotiate prices appear as if they were able to move a modest number of hides and interestingly enough, we have heard unconfirmed rumours that some of the hides bought at the end of last week will be able to be shipped before the December 20 deadline in order to arrive before Chinese New Year.
In the meantime, the overall product make for most packers appears to be running towards producing a large number of Jumbos and Super-Jumbo hides. We are told that there are only a handful of heifers being produced by most packers. This is important as we are encountering a wide range of opinions as to the exact value of heifer hides. Some insist they are worth much more than our last reported trading level, while others insist they are substantially discounted to steer hides due to the fact the drop credit value of the split is not valued as much by tanners.
We can share that the long four-day weekend [for Thanksgiving] did result in a handful of sales reported and we can share we have sales on regular weight HTS reflecting levels of $100, while sales on BBS check in at levels of $102, both lower than our last reported levels. Meanwhile, we have a few reports on heifers reflecting a wide range of trading as we have HNH from $90-$96, while a sale on HBH is reflecting levels of $86.
As to business on cowhides last week, the majority of sources are reporting a similar tone to the big packer market. According to a number of sources, it appears as if the “bloom is off the rose” a bit in regards to cowhides. Reliable sources reported those attempting to push for even higher prices were unsuccessful and found buyers with no interest in receiving their offers. Meanwhile, other members of the trade share that a number of producers struggled to obtain bids equal to their last established trading levels.
What we found even more interesting were reports of some producers who had been boasting about strong sold forward positions actually pressing for business towards the end of last week with some selections that could be shipped for prompt shipment.
We were able to round up a few confirmed reports of trading with processors laying claims to selling steers at $98 for HTS and $97 for BS, while the only other sale reported was a trade on HNDC at $89. However, worth noting is that we have unconfirmed reports of sales taking place at the end of last week at levels under our price guide an numerous cow selections.
Reports from overseas insist it was another quiet week of trading and based on the last three USDA Export Reports it certainly appears the main buyer (China) has suddenly gone very quiet. In the meantime, we have news that there will be a tender for Korean cattle hides the next two weeks with approximately 280,000 hides available. According to sources, many tanners are interested in this tender and widely speculated that the timing of this tender could not come at a worse time in regards to the market for sellers.
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