US Perspective—04.04.17
04/04/2017
www.themaxfieldreport.com
Last week in the big packer trade, members received quite a jolt mid-week when one of the big packers opted to sell HTS at lower levels, selling freely at levels of $68, which translated into prices $4-$5 lower than the last reported trading levels.
Of course, this wreaked a considerable amount of havoc in the marketplace on the first day of the APLF exhibition in Hong Kong (March 29), while it also weighed heavily on other big packer hide selections, forcing prices lower, roughly by $1-$2.
Overall, the number of hides changing hands last week was decent; conventional wisdom would tell us that when packers are willing to accept such sizeable discounts, they usually sell in volume and we have no reason to believe that last week was an exception. In fact, we tend to lean with other pundits in the trade who are of the opinion that this Thursday’s USDA Export Sales Report is likely to reflect some sizeable sales by packers as there were a decent number of sales last week, in addition to sales that likely were not reported on last week’s report due to travel.
Comments from those who travelled prior to the APLF event were mixed. We heard from some who said they were pleased with the results of their trips, while others shared they would have sold the hides they did whether they were in Asia or not. The sizeable majority of those in attendance at APLF agreed that leather business for most tanners is decent. Tanners were reported to have plenty of complaints; however, poor leather orders were not one of the complaints.
Elsewhere, in the cowhide trade, last week saw sellers make their best attempt to hold prices steady; however, once news broke that big packer hides prices were trading lower and some selections at substantially lower levels, sellers realised that if they were going to add sales last week, it was going to be at lower levels. Popular opinion of the trade is that sales last week for cowhide producers was not quite as brisk as that seen for big packer hides, while those sellers who held out as long as possible in hope of selling at steady levels likely did not enjoy as many sales as competitors who lowered their prices early in the week.
This week, we suspect that we will see producers at least adjust their asking prices to reflect the trading levels seen last week. As to additional price declines this week from sellers, we tend to suspect sellers will feel they discounted hides enough last week and if we are correct on how many hides were sold last week, buyers may find buying hides at even lower levels a difficult task.
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