US Perspective—20.06.17
20/06/2017
www.themaxfieldreport.com
Reports from members of the big packer trade claim demand slowed last week as it appears a combination of limited offers from packers and decent sales over the previous three or four weeks satisfied, at least for the moment, the appetites of most tanners.
Several sources commented last week that the number of bids was noticeably less than in the past few weeks. In addition, it also appears efforts by packers to obtain higher prices were met with a considerable amount of resistance from the few tanners willing to share their price ideas, while those buyers looking for bargains found packers with little patience for ideas below the last traded levels.
As it pertains to prices last week, sources reporting buyers of HTS were looking for product around $70 C&F, while there were some isolated reports of a few buyers willing to pay as much as $71-$72 C&F. Interest in BRS and CBS was close to $69-$70 C&F, while interest on BBS was around the $71-$72 levels.
It is highly unlikely packers were able to liquidate their production last week, which would have been a tall order considering last week’s slaughter of 628,000 head, the largest of the year.
We continue to hear reports of wet blue producers aggressively pursuing voluminous business as speculation of the trade is that there is a considerable amount of wet blue unsold.
In other news coming in from Asia, we have it from reliable sources that members of the hide trade in China have gone to jail. According to reliable sources, the Chinese government had set up a sting investigation in Wenzhou, as, allegedly, a number of tanners were illegally importing wet salted hides from various South American countries. According to reports, four tanners and six hide traders have allegedly been arrested and put in jail. Sources claim that the tanners involved buy decent quantities of US cowhides and we will offer more information on this situation as it is available.
Elsewhere, reports from members of the cowhide trade report a similar situation as the big packer trade. Overall, it appears producers entered last week in possession of strong sold-forward positions, encouraging producers to look to improve upon their last traded levels. According to reports, the week got off to a sluggish start, while bids picked up in the second half of last week; however, the consensus of the trade was that buyers struggled with thoughts that they would have to pay more money for hides.
Meanwhile, the number of cows in the slaughter mix continues at unseasonably high levels with 122,000 cows in last week’s mix, which is 10,000 more animals than a year ago. In the meantime, with higher than expected prices continuing to be paid for trim products, popular opinion amongst pundits is that it is likely we will continue to see cow slaughter numbers remain 8%-10% higher than a year ago for the interim.
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