US Perspective—14.02.17
14/02/2017
www.themaxfieldreport.com
Packers saw decent interest at the start of last week with sources reporting enquires from a number of different countries. However, the challenge facing packers last week was that the majority of buyers appeared unwilling to follow the incrementally higher asking prices of packers, as many tanners started the week with price ideas $1-$3 under the last reported trading levels.
Sources share that packers countered bids last week at full asking prices and by the middle of the week, many buyers submitting bids withdrew their interest upon learning of packers’ reluctance to trade the market lower. Meanwhile, those tanners in need of product were reported to have quickly improved their ideas and although a moderate number of hides were sold, popular opinion is that it is unlikely that packers cleared their slaughter last week.
There continue to be reports of producers of wet blue anxious for sales and looking for voluminous type business for prompt shipment. Unfortunately for producers, various sources report that although there are claims of business concluded, we are not aware of any substantial volumes of product changing hands and we will likely see producers continuing their efforts this week.
Elsewhere, reports from the cowhide trade claim that the majority of producers started the week with thoughts that they would try to raise prices, attempting to capitalise on the momentum of decent sales these past several weeks. Unfortunately for those selling hides, it appears their efforts were met with a considerable amount of resistance and popular opinion of the trade is that business concluded last week was minimal for the most part.
Trading levels were steady or incrementally higher for most selections, while it is unlikely that producers sold a full week of production.
This week is setting up to be an important week of trading, especially keeping in mind that we have not seen much interest in the past two or three weeks. There is speculation building that a number of tanners need to enter the market in order to cover some raw material needs. There are also members of the trade leaning towards the opinion that there are some producers who are looking for business this week in order to extend their sold-forward positions.
We will see slaughter levels running 10%-12% higher than a year ago for the next several weeks. Meanwhile, as mentioned earlier, there continue to be numerous reports of the various producers of wet blue lacking sales leading to rumours of a sizeable overhang of unsold material.
We have not heard of any producers reducing their soaks; however, if producers fail to liquidate their unsold inventory soon, we would think that this is a likely possibility. That said, we are of the opinion that this week is setting up to offer the trade some better insight as to what we can expect moving forward and we are looking for a busy week of trading, the only question is: at what levels?
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