US Perspective—18.09.18
18/09/2018
www.themaxfieldreport.com
Offer lists of many packers last week appeared to have a few more loads for sale, with some of the packers adding a few more selections to their offer lists. On asking prices, most offer lists were unchanged with levels of the week prior. What we found interesting were reports that shipping times on many of the selections were noticeably sooner than prior to the All China Leather Exhibition at the end of August.
As to interest last week, many shared they were pleasantly surprised to have received more bids early in the week compared to the past two or three weeks. However, the price ideas of most buyers were deemed rather aggressive by packers, as they were running $2-$3 and more under the official asking prices.
Overall, the consensus of the trade is that last week was not a busy week of trading and once again it is very likely that packers were unable to clear their production, continuing a theme we have seen way too often this year.
The offer lists of cowhide producers at the start of last week appeared as if they were more populated than the week before, especially offers of HBC and to a lesser degree, HNC. The good news for those selling hides is that most producers appear well sold on HNDC, especially ones of better quality. As to asking prices last week, producers appear as if they softened their ideas by roughly a dollar to start the week, while those producers with offers of HNDC started last week with asking prices unchanged from the week prior. We did hear of a couple of premium HNDC suppliers who raised their asking price.
In other news, the number of cows in the harvest mix continues at an unseasonably high pace. Over the course of the third quarter, harvest levels have been running close to 8% higher than a year ago. We do not look for harvest levels to ease: beef demand continues to exceed the expectations of packers, coupled with reports there are still more-than-ample supplies of market-ready cattle available for harvest. In addition, packers continue to register lucrative margins, despite hide values that are anywhere from 40%-50% lower than a year ago. What this market needs is some sustained demand over the course of several weeks.
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