US Perspective - 11.06.19
11/06/2019
www.themaxfieldreport.com
Packers entered last week with offer lists that still appeared fairly populated. Most were reported to be offering a full complement of selections for sale. In addition, sources share that shipping times on many of the selections offered were still for June shipment. Popular opinion of the trade is that there were still plenty of hides for sale by packers.
They started the week with asking prices unchanged from the past two or three weeks, while most members of the trade reported that the week got off to a somewhat sluggish start. The good news is that by the middle of the week, we started to see the number of bids improve. However, there were still a number of buyers continuing to bid aggressively lower than asking prices – bidding at levels on a delivered basis that were lower than the asking prices of packers on an FOB basis. Packers were making their best effort to hold trading levels as close to steady as possible.
The number of bids last week appeared in line with the previous week and with most of the packers insisting on levels no worse than the week prior, the sentiment of the trade is that the number of hides changing hands last week did not equal their production.
Members of the cowhide trade report a similar situation there. Producers are reported to have entered last week in possession of offer lists with a full complement of selections offered. In addition, it appeared that the majority of hides offered were still available for June shipment.
A group of producers opted to leave asking prices alone, as sellers appear as if they are of the opinion trading levels are low enough. As to interest last week, according to reports, things got off to a slower-than-expected start; however, by mid-week things began to pick up and it appears the number of bids was in line with the week prior.
As to sales last week, popular opinion of pundits is that it did not appear as if the number of hides changing hands exhibited any improvement over the previous week and it’s unlikely we saw producers clear their production last week. It appears trading levels for the most part were in line with the week prior.
We recognise that sellers in the US have enjoyed several weeks of decent interest since the first of May. However, if we are being honest, this improvement in demand has only allowed producers to keep pace with the harvest and we remain of the opinion there is still a considerable overhang of unsold hides that continues to hang over the market.
In addition, we continue to hear sellers in Brazil, Australia and Europe have plenty of unsold hides and, with European summer vacations only a couple of weeks away, this could pose some problems for European sellers; we understand there is a large number of unsold hides hanging around in various European warehouses.
We are impressed by the fact that US sellers appear as if they have been able to establish a trading plateau over the past couple of weeks; however, we have concerns about how long this can continue, as it appears there are still a number of unsold hides worldwide.
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