US Perspective—12.07.16
12/07/2016
www.themaxfieldreport.com
Last week saw packers offer a bit later than usual due to the Fourth of July Holiday at the beginning of the week. Once packers finally released their offers lists to the trade, it appeared most packers had a full complement of selections offered, while popular opinion of the trade was that there were more than ample quantities offered as well.
As it pertains to asking prices, most sources reporting prices were also in line with the week prior. According to the majority of sources, interest was relatively sluggish last week, with several pundits commenting they were disappointed with the amount of interest they saw.
The majority of prices ideas shared by buyers last week were under the asking prices of packers and neither buyers nor packers appeared as if they were willing to concede to the other. Overall, for the most part, prices were unchanged with the week prior, while there are some members of the trade who would argue that prices of HNS and BBS were firm, and the loads sold last week were steady, if not incrementally higher. All other trading reported on other big packer selections was in line with the week prior, while the consensus of the trade is that it is unlikely that packers sold their holiday-shortened week of slaughter.
Elsewhere, reports from the cowhide trade are nearly identical to those in the big packer trade. Sources report producers were in no hurry to offer and most offer lists were made public a day later than usual due to the holiday at the start of the week. According to sources, offers last week saw producers with a full complement of offers, while also offering more than ample quantities, while asking prices unchanged with levels of a week ago. In the meantime, members of the trade report that interest was fairly muted last week, while the handful of buyers willing to share their price ideas had thoughts lower than asking prices of sellers. Overall, popular opinion of the trade is that business concluded last week was minimal, while trading levels on hides exchanging hands believed to be steady with the last reported trading levels, while it is unlikely that producers sold their production last week.
Last week the market ended in an impasse, as neither buyers nor sellers appear as if they are willing to concede to the other. As to our initial ideas at the start of this week, we tend to believe that we will likely see offer lists tomorrow in line with last week’s and it will be interesting to see how long buyers and sellers are willing to wait for each other to blink.
Slaughter levels continue to run at their highest levels of the year, while numerous sources continue to say that leather business is not exhibiting any real signs of improving. When checking with some of the major shoe brands that subscribe to our report, many are sharing that their outlook for leather business the second half of 2016 remains soft. Many of the brands are pointing to political uncertainty in Europe, coupled with inventory levels that are higher than ideal; those looking for a substantial upturn in business later this year, could be disappointed.
If we were a seller, we would prefer to continue to sell into this market as we fail to see much upside potential in prices at least for the near-term.
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