US Perspective—10.01.17
10/01/2017
www.themaxfieldreport.com
Members of the US big packer trade report a mixed bag of trading last week, as it appeared that sellers and buyers for the most part were unable to get on the same page in terms of prices. Sources report that the ideas of packers were to try to push prices $1-$2 higher last week, while the majority of buyers had price ideas $1-$2 below the official asking prices of packers.
With buyers and sellers unable to come to any consensus on price, trading for the most part was limited. There were a few isolated instances where sellers were able to achieve higher trading levels but it is unlikely that packers cleared their production last week.
Packers appear as if they were encouraged by the number of buyers willing to share ideas last week, leading many to the opinion that there are tanners who are short bought. In addition, packers are also encouraged by the fact that there was a substantial amount of business that was not booked last week and it will be interesting to see how much of this is carried into this week.
In the cowhide trade, it does not appear as if the holiday-shortened week of trading slowed sellers last week. By the second half of the week, we were hearing that there appeared to be a fair number of buyers bidding and with producers dead set on not accepting prices below their last traded level, it appears many buyers begrudgingly improved their ideas and a fair number of hides were sold.
It appears the number of cows in the slaughter mix is starting to show signs of easing. Over the past two or three weeks, we have seen lower numbers than a year ago and this, coupled with the perception that many producers possess decent sold-forward positions and the fact that interest last week appeared broad-based, is leading to thoughts that we might see some higher trading levels this week.
This is the first full week of trading in the last two or three weeks and we have both buyers and sellers who are looking to concluded business, especially considering the general lack of sales the past few weeks. There are still some tanners who are short-bought and we look for these tanners to be much more active this week for hides that can be delivered following the Chinese New Year holiday that starts later this month.
We also suspect there are more than a few producers that have seen their sold-forward positions dwindle over recent weeks. As a result, we suspect we will see a number of producers in search of some decent sales on certain selections this week. We look for producers to come out with offers this week no worse than steady with last week and we would not be shocked if we see some raise their asking prices in an attempt to change the psychology of buyers. We could see a busy week of trading this week, the only question is, at what price?
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