Courtesy of The Maxfield Report
www.themaxfieldreport.com

Interest on big packer hides was mixed last week. According to sources, there were a decent number of buyers interested in buying; however, the vast majority appeared to struggle with thoughts of having to pay even higher prices. Overall, it appeared sellers met a considerable amount of resistance the middle of the week. However, as the week progressed, it appears buyers resigned themselves to the fact they were not going to be able to buy at the last reported trading levels and it appears there were some minimal volumes exchanging hands at higher prices by the end of the week.

Trading levels were calling HNS as high as $115 FOB and rumblings of even higher prices, while BBS were sold in a range of $113-$114 FOB and unconfirmed reports of higher money. Meanwhile, HTS sold at levels of $110-$111 FOB, while sales on BS were only a half a dollar behind. Elsewhere, it appears packers who had been pressing for sales on Jumbo and Super Jumbo steer hides were a bit tougher on prices last week, as buyers with thoughts they were going to be able to negotiate prices found sellers unwilling to trade several dollars under their asking prices. In all, popular opinion doubts packers cleared their slaughter last week; however, with slaughter levels running at record low levels, it is not posing a problem.

To a recap from the ALCE, the consensus of the trade is calling attendance lower than last year. Foot traffic in our opinion was certainly lower than last year and, in fact, many people commented that their stands were busier this past spring at the APLF. In the meantime, we heard a few isolated comments from exhibitors who claimed they were pleased with their results from the show; however, the vast majority of US trade in attendance was disappointed with their overall results.

We have trading to report from over the long weekend (Friday-Sunday as we were traveling Friday), sources report selling regular weight BS at $109.50, while Jumbos reflect levels of $114-$117. Other trading is calling HNDC $90, while sales on regular eight HTS reflect a range of $110-$111.

In regards to the cowhide trade, the consensus was that interest overall was sluggish last week, as firm ideas from producers, coupled with European and Australian producers with offers dollars under the ideas of US producers, resulted in a lacklustre week of trading. Worth noting, the vast majority of producers at the show appeared very bullish at the opening; however, about halfway through producers began realising that it was unlikely they would obtain their asking prices due to the lower priced offers.
In the meantime, we were hearing unconfirmed reports that several European and Australian selling cowhides were taking even lower
money by the end of the week, leading to speculation that perhaps producers in the US would have to rethink their prices heading into this week. Meanwhile, it is widely agreed that producers likely did not sell their slaughter last week and even with the number of cows in the slaughter mix running well below levels of a year ago, there are some members of the trade questioning how long producers can insist on the firm tone of the market.

Meanwhile, as far as prices last week, we understand that prices of HNDC might have been a bit overstated at $92 FOB the week prior and appears there was trading at $90 FOB. Other trading is calling HNC around the $78 FOB market, while prices of HBC may have also been a touch overstated, as we had trading at $69 in the north and $66 in the south.

THE LOOK AHEAD
As to what we expect for this week, in our opinion, it appears the market remains in a two-tiered situation. Big packer hides continue to remain firm with some sellers registering additional increases, although sellers admit it was not easy obtaining higher prices. Meanwhile, it appears those selling cowhides are struggling to hold prices steady against the perception of weaker prices on similar product out of Europe and Australia.

In the meantime, we suspect packers will likely continue their efforts of minimal offerings, while testing the all-time highs of the market, especially with slaughter levels running on the average 8-10% under levels of a year ago. However, we will certainly be keeping an eye on offers of wet-blue hides, especially after the huge cancellation from last week’s report, which we are still trying to gather information about.

In regards to cowhides, we are starting to suspect that a few producers are starting to feel the heat of not liquidating their production every week, even though the number of cows in the slaughter mix continues at unprecedented levels. Meanwhile, we tend to suspect news of other origins willing to trade similar type material at lower levels is likely to create a few problems for producers looking to obtain prices several dollars higher.

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