US Perspective—11.10.16
11/10/2016
www.themaxfieldreport.com
Members of the big packer trade claim that they saw a few more bids coming in towards the end of last week from Chinese tanners returning to their offices early from their holidays. However, sources report that the week as a whole was relatively uneventful, as most had anticipated.
From a price standpoint, the substantial majority of sales concluded were at steady levels, while we are aware of a few isolated pieces of business where sellers were able to eke out some incremental price improvements.
Reports from Asia claim the week-long holiday in China at the start of October took a huge toll on interest this week, as expected.
Packers are not pressing for new business on wet-salted hides; however, producers of wet blue still appear anxious for additional business, in spite of reports that there have been some decent quantities sold in the past couple of weeks. We are starting to hear a few isolated reports that there appears to be better interest on certain selections of wet blue splits in the past week or ten days and if this is indeed correct, we assume tanners would welcome this.
The good news for those selling hides is that it appears that trading levels were steady or incrementally higher on some selections.
It will certainly be interesting to see how anxious tanners are to buy this week, especially keeping in mind that from now until the middle of November tanners believe some of the best hides are available. In the meantime, sellers cannot rest on their laurels, as slaughter levels continue to run at their highest levels of the year (almost 10% higher than in the same weeks last year). In addition, as the weather is turning colder (last week Western Nebraska had a dusting of snow), hide weights are on the rise and cattle are already coming to slaughter with long hair, and it will not be long until we are in the middle of the mud and manure season.
We have to tip our cap to those selling hides as they appear not to be too hindered by the larger slaughter volumes of the past six months (roughly 1 million more animals slaughtered) as prices for the most part have remained in a very narrow trading range for most of this year. We will continue to see producers convey a firm tone to the market and doubt they will have much patience for buyers with ideas lower than the last established trading levels.
We suspect producer have a difficult task ahead of them if they believe that they are going to be able to push price higher.
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