US Perspective—08.05.18
08/05/2018
www.themaxfieldreport.com
Last week saw packers once again in possession of large offer lists, with many selections also available for prompt shipment. It appeared that packers started the week with prices that were $1-$2 lower than the previous week; however, worth noting, that even with the concession in asking prices, numerous members of the trade insisted they had knowledge of sales that took place the week prior at levels even lower than these adjusted asking prices.
As the week progressed, the majority of sources claimed that the number of bids they were seeing were noticeably fewer than the preceding week, and according to most members of the trade, last week was definitely slower in their opinion than the last several weeks. However, we did encounter a handful of sources who shared that they were fortunate enough to see interest improve late last week, although they were also quick to share that this did not mean that buyers had ideas that were anything but aggressively lower than the last traded levels.
It is highly unlikely that packers were able to liquidate their production last week, especially in light of the fact that last week we saw the largest harvest of the year at 647,000 head. The expectation of pundits is that we are likely to see a continuation of large numbers over the next three weeks leading up to the Memorial Day holiday on May 28.
Although the preference of packers would have been to hold prices as close to steady as possible, it appears the hides changing hands last week were trading at lower levels. Popular selections traded at levels a dollar to as much as two dollars lower, while less popular selections saw declines of $2-$3 and in some instances even more.
Reports from members of the cowhide trade are very similar to those from the big packer trade. Producers entered the week in possession of offer lists that appeared as if they were fairly well populated, with a number of selections appearing as if there were more than ample numbers available for sale. In addition, sources report that a number of producers appeared to have several different selections of cowhides available for prompt shipment.
As to asking prices, sources report these as mixed. A number of producers appear as if their modus operandi is to leave asking prices alone, preferring to counter bids when submitted. While we are also aware of some producers who lowered their asking prices, especially some who had price ideas higher than their competitors’, which we suspect was an effort to try to align asking prices closer to actual trading levels.
In regards to business last week, it appeared that interest was never able to recover from the slow start.
With the majority of buyers well aware of the underlying pressure facing the market, most were passing on very aggressive price ideas, with the majority of buyers unwilling to consider.
The number of hides changing hands last week is likely to be one of the slowest weeks of trading in the last several weeks, while as it pertains to trading levels, sellers made their best effort to hold prices as close to steady as possible, which no doubt took a toll on the number of hides trading.
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