US Perspective—24.10.17
24/10/2017
www.themaxfieldreport.com
Producers of big packer hides entered last week brimming with confidence after a decent week of sales the week prior, combined with a decent amount of business that was not concluded due to buyers’ price ideas falling short of established trading levels. This encouraged several of the packers to raise their asking prices by roughly a dollar across the board, while some selections saw increases closer to $2.
The consensus of the trade is that trading was not nearly as robust as the week prior. In addition, several sources reported sellers met a considerable amount of resistance to their efforts to raise prices, while sellers appeared as if they had no patience for buyers who had price ideas lower than the last traded levels. The other item catching the attention of the trade was the fact that offer lists of the majority of producers appeared as if they were still fairly well populated, while there was no noticeable change in the shipping time of hides offered.
As to how many hides changed hands last week, popular opinion of the trade is that sales fell short of the harvest, leading some members of the trade to wonder how committed packers would be to obtaining higher prices this week.
This is likely to be an interesting week of trading in our opinion. As mentioned earlier, packers entered last week buoyed with confidence. However, sales last week fell well short of expectations leading to thoughts that packers likely saw their sold-forward positions eroded somewhat.
Harvest levels moved back up over 630,000 head and with expectations that we will continue to see larger levels (keeping in mind packers’ margins are still hovering around the $100 per head level) it will be interesting to see how committed packers are to achieving higher prices, especially if they see another week of lacklustre interest.
Cattle hide weights are increasing rapidly. As a result, we are hearing reports that some packers may be a bit oversold on some of their regular weight selections, while we look for the number of offers of Jumbo and Super-Jumbo hides to increase as we move forward.
In regards to cowhides, it appears that producers do not enjoy as strong a sold-forward position as their big packer brethren do. In addition, there still appears as if there are too many offers of cowhides from suppliers in Europe and this, coupled with more than ample offers of wet blue from Brazil, is likely to keep pressure on sellers.
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