US Perspective—17.05.16
17/05/2016
www.themaxfieldreport.com
Offers by big packers last week ranged from steady to $1-$2 higher depending on the packer and the selections. Packers in general appeared buoyed by decent sales the week prior. Although there appeared to be a decent number of people attempting to buy hides last week, there were not quite as many buyers bidding as the week before. However, the majority of buyers bidding last week appeared to be more “serious” buyers as the price ideas of buyers were only $1-$2 away from the asking prices of packers.
Last week’s USDA Export sales report was likely missing a number of “late-week” sales from the week prior and a good possibly that this week’s report may reflect larger sales than last week.
As it pertains to trading levels last week, overall, it appears prices were up $0.50-$1.00, depending on the selection, as well as the packer. Meanwhile, as to the number of hides sold, we are leaning towards the opinion that packers came close to selling a week’s worth of production, while popular opinion of the trade is that there were not quite as many hides sold last week as the week prior.
Reports from members of the cowhide trade claim producers continue to struggle, as demand for hides continues to fall short of production. Worth noting, when checking with a number of producers last week, many where making their best effort to stay ahead of the market and it appears several producers were willing to negotiate prices.
Last week prices were down anywhere from $1-$3, depending on the producers and the selections. Meanwhile, popular opinion of pundits is that in terms of the number of hides sold, sales last week were close to the number of hides sold, allowing producers to keep their sold-forward positions steady. However, few if any producers are laying claims to enjoying a strong sold-forward position as of this writing.
Looking ahead to this week, although slaughter levels are on the rise (we have seen 119,000 more head harvested in the last four weeks than in the same weeks last year), packers continue to insist they remain well sold. This, coupled with reports there was a fair amount of business last week not concluded due to some buyers refusing to improve their ideas, is leading us to believe packers will continue to push for no worse than steady levels, if not slightly higher levels again this week.
In the meantime, producers in the cowhide market are not enjoying a similar fate to that of their big packer brethren. Overall, it appears there is not enough demand for cowhides to keep up with production. This, coupled with reports that there are a number of cowhide producers in Australia, Europe and Brazil pushing for orders, coupled with reports many new leather orders appear geared more towards aniline type leathers, means it is likely we will see pressure continue.
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