US Perspective - 17.2.15
Courtesy of The Maxfield Report
www.themaxfieldreport.com
(NB. Due to the President's Day Holiday, there was no Hide Report on February 16, this was published on February 13.)
THE TRADE TALK
Reports from members of the big packer trade for the most part continue to claim, as expected, that this was not a particularly busy week of trading. However, we have encountered a couple of sources who shared that they had more business this week than last week.
Overall, the sentiment of the trade is that it is highly unlikely that we saw packers liquidate a week's worth of production. In the meantime, in regards to prices, we would say overall that prices were roughly steady to a dollar down on most selections. Meanwhile, we encountered sources today who shared where they were able to buy heifers this week and the prices they paid were substantially under the last reported trading levels, and evidence we were lagging the market.
Reports from Asia were almost non-existent as the majority of the trade is set to enjoy their Chinese New Year celebrations. We have heard that there were still some tanners out "poking around" looking for bargains and depending on the packer / traders and how badly they wanted to place a few more sales on the books, we have heard reports of some business concluded at lower levels.
As far as sales today, we were able to register a trade on BBS at $103, while sales on Super-Jumbo BS check in at $105. On female selections, we have sales on HBH at $80, HNDC at $78 and HNH at $83. Meanwhile, all of the other trading reported focused on HTS with a wide range of prices, as we have trading on regular weights ranging from a low of $95 to high of $98, while Jumbo HTS sold in a range of $103-$104, while we have a sale on Super-Jumbos registered at $104.
Our weekly TMR Big Packer Hide Index comes in two dollars and fifteen cents lower than a week ago, checking in at $91.70, primarily due to a substantial reduction in the price of HBH. Compared to a year ago, our index is down $10.25 or 10.05%, while for the year, our index is down $2.45 or 2.602%.
Reports from members of the cowhide trade report that enquiries were slower this week, as most had expected. However, worth noting, we have reports that there were many more buyers asking questions about HBC. In fact, we had confirmation his afternoon from a couple of producers who shared that they were able to parlay this increased interest into higher trading levels by the end of the week.
Overall, the sentiment of the trade is that although, as expected, interest was less than last week, we have heard from more than a couple of sources that the interest seen this week by most producers seemed to be of a serious nature and not tanners simply out looking for bargains. Meanwhile, it appears the trade is divided as to if producers were able to sell a week's worth of production; however, we know of a few producers who are feeling a little bit better about the market than they did at this time a week ago.
We were able to muster a handful of sales and can share that we have reports on HBC in the north selling at $62, while sales in the south reflect $60, while there are rumours claiming some sellers may have sold at even higher levels. Meanwhile, we also have sales on HNC reflecting levels of $70, while we have processors reporting that they sold HTS at $93.
Our weekly TMR Cowhide Index comes in a dollar and twenty-five cents higher this week, checking in at $68.00. Compared to last year, our index is down $11.95 or 14.95%, while for the calendar year, our index is up $4 or 6.25%.
As we go to press, it remains a challenge to find many positives as pertains to the big packer market, as it appears the situation at west coast seaports, coupled with leather business that appears to be falling short of levels of a year ago, is weighing heavy on many members of the trade. In the meantime, members of the cowhide trade are having their fair share of problems from the situation on the west coast; however, we have heard from more than a few sources that interest was actually better than many had anticipated, especially for HBC.
As to what we expect for next week, Asia will be closed, celebrating Chinese New Year (February 19) and we do not expect there to be a lot to report. However, we have heard from a number of sources in Asia that several tanners left instructions with the various agents that if anything "interesting" should come up as it pertains to offers next week to be sure to give them a call. That said, we know that producers have positioned themselves the best that they could for a lacklustre week of interest; however, there is no question that the problems resulting from the situation on the west coast has "upped the ante" for many.
Meanwhile, the temporary shutdown of all west coast ports from yesterday until Tuesday was not unexpected, as some would think. We believe both sides are attempting to position themselves to gain the upper hand in their negations. In the meantime, we are hearing unconfirmed reports by some members of the trade who fear the potential for a lockout may be moving closer to a reality than some people think.
At the end of the day, packers continue to harvest animals and those producing hides need to continue to ship product and this exercise is increasing in difficulty with each week that passes. This is why those with money and available equipment to ship can likely negotiate prices; however, most do not have such a luxury and it remains difficult to see much upside potential in the market at this time.
