US Perspective—26.06.18
26/06/2018
www.themaxfieldreport.com
Packers entered last week in possession of large offer lists, accompanied by “rumblings” that several had multiple selections available for prompt shipment. Worth noting, this certainly contradicted claims by some of the packers that they were sold until August on a number of selections.
Most sources claim the week got off to a sluggish start, as multiple sources shared that the number of bids seen the first half of last week was disappointing. However, once we reached the second half of last week, there are plenty of reports claiming both packers and traders appeared much more aggressive and willing to negotiate prices, which led to a number of claims of business concluded by packers at levels that would be well below official asking prices.
Rumours towards the end of last week claimed packers sold HTS at levels as low as $44 C&F, while BRS and CBS sold at $43 C&F. In addition, BBS were rumoured to have sold at $54 C&F, while trading on HBH were supposedly as low as $35 C&F. Even HNS were unable to escape the claims of trading at lower levels, with sales in China concluded at $61 C&F.
Large sales are necessary, especially considering harvest levels, which saw the largest knock of the year last week at 664,000 head.
We heard the first reports of some packers facing issues with customers walking away from contracts.
In the cowhide trade, producers entered last week still in possession of large offer lists. Producers were disappointed with the number of bids in the first half of last week; however, the second half of last week saw some producers become quite a bit more aggressive and it appears as if some bit the bullet and were able to move some decent volumes of hides, albeit at lower trading levels, which many pundits believe was a necessary evil, especially considering that the number of cows in the harvest mix refuses to ease.
We remain of the opinion that demand continues to struggle to keep pace with production and even though we have seen some decent sales over the course of the month of June, prices of big packer steers are off roughly 13% (using HTS as the benchmark) and unfortunately, members of the trade do not appear as if they are confident that an end in the decline is in sight.
Share this story:
