US perspective - 24.1.13
28/01/2014
www.themaxfieldreport.com
Please note we will take a publishing break from January 27-31. This is one of two publishing breaks we observe each year.
Interest on big packer hides fizzled towards the end of the week. However, worth noting, we attribute the slowdown more towards the fact that the packers appeared disciplined as to how many hides they were willing to sell as opposed to interest from prospective buyers waning. Overall, the sentiment of the trade is that packers saw prices move higher this week by $1-$2 / hide, depending on the selection. Meanwhile, the trade also appears in agreement that as far as the number of hides sold this week, it is likely we did not sell quite as many as last week.
In the meantime, reports from overseas claim many tanners appeared as if they were in “panic mode” the past 2-3 weeks due to news that slaughter levels would fall short of levels of a year ago. Many tanners fearing they would not have enough coverage have stepped into the market the past couple of weeks prior to their Lunar Holidays and this allowed packers to push prices $5-$6 / hide higher since the start of the New Year.
As to trading today, we were still able to round up a handful of sales from business that was still pending. Sales shared with us include JBS at $111, while sales of HTS reflect a range of $103-$104. Other trading is calling BBS as high as $106, while sales on HNS still reflect levels of $108.
Our weekly TMR Big Packer Hide Index comes in this week up a dollar and 55 cents versus last week checking in at $101.50 and for the first time in the history of The Maxfield Report, the index exceeds one hundred dollars. Worth noting, this is obviously an all-time high for our Big Packer Index, exceeding the previous set just last week at $99.95. For the record, today’s index is $9.05 or 9.79% higher than a year ago, while for the calendar year, our index is up $6.55 or 6.99%.
Reports from members of the cowhide trade are also claiming a successful week of trading for producers. The week started with producers actually offering a few more hides than many had expected; however, this is likely a result of a fairly large cow slaughter last week where we saw slaughter numbers that had not been that large since January 2013. Popular opinion of the trade is that the reason we saw such large numbers is that many farmers had delayed killing their cows until 2014, attempting to delay taking the revenue until the 2014 fiscal year.
Fortunately, for sellers, it does not appear as if the added volume has had any negative impact on the market, as sources claim that there is more than adequate demand for cowhides as tanners seek less expensive alternatives. As far as sales to share, we can report processors obtaining $102 for HTS and $101 for BS. Other treading is calling sales on HNDC as high as $91, while sales of N-HBC reflect levels of $72.
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