US Perspective—01.12.15
01/12/2015
www.themaxfieldreport.com
According to sources in the big packer trade, last week was relatively uneventful. Sources attributed the lack of trading to a variety of reasons, ranging from a general lack of offerings, the Thanksgiving holiday, higher asking prices from packers and decent sales by packers in the previous two or three weeks. The majority of sellers laid claims that they saw their fair share of unsolicited interest last week, although the lion’s share of buyers wanted to pay prices of one or two weeks ago and sellers expressed little interest in chasing ideas below their last traded levels.
We continue to hear reports of sellers successfully selling at full asking price as it appears there are still tanners in search of hides. Although there is no question that some sellers were able to achieve sales at their higher asking prices last week, there appear still to be plenty of questions as to exactly how many hides are exchanging hands at these firmer or slightly higher levels. Members of the cowhide trade also have a similar tale to tell. Sellers continue to insist that they enjoy strong sold-forward positions and have no reason to sell at ideas under their asking prices.
This week we do not expect much of a change in the posture of sellers. They continue to insist they possess a strong sold-forward position, although if one were to total the USDA Export Sales Report for the last three months, one would tend to differ. In the meantime, last week’s harvest at only 459,000 animals is much lower than many pundits were expecting, including your editor, and is not likely to put any real pressure on sellers as well.
Those selling hides have roughly the next two-and-a-half weeks to ship hides to Asia in order to have the hides arrive before Chinese New Year, while shipments south of the border will close at the end of next week. Obviously, sellers are well aware of the logistical “opportunities” this will create and it will be interesting to see how sellers manoeuvre these “hurdles”. Elsewhere, opinions appear divided on the future trend of the market. Many tanners are still of the opinion that this is a “false” or “temporary” firm market and they are looking for pressure on prices as we move through December, into the month of January. Sellers insisting that they have successfully navigated all of the pending issues with logistics in regards to the Christmas and New Year holidays in the west and Chinese New Year in the east. This, coupled with strong sold-forward positions and unseasonably low slaughter levels, will assist them in keeping prices firm if not moving them higher. It looks like we could be in for excitement in the month of December.
Share this story:
