US Perspective - 01.10.19
01/10/2019
www.themaxfieldreport.com
Packers entered last week with sold positions that appeared a bit mixed. Those who appeared to have well populated lists the week prior had offer lists that were not nearly as populated, while some of the packers who had not been offering the past several weeks were reported to have had a modest number of hides offered last week.
Asking prices appeared unchanged with those of the past few weeks and packers appeared as if they had no intention of negotiating prices.
We heard some rumblings that the number of wet blue hides for sale over the past couple of weeks reflected a substantial increase.
As to interest last week, it appears that things go off to their usual slow start. However, by the second half of the week, sources claim the number of bids picked up. As to the ideas of most buyers, many continued to bid at $2-$3 under the last reported trading levels and packers were unwilling to succumb to these lower ideas. While many buyers believe that packers do not possess strong sold-forward positions and refused to improve their ideas.
Buyers who were willing to pay steady levels appear as if they were able to buy as many hides as they desired; however, we are not aware of many sellers laying claims to a stellar week of sales.
Chinese tanners are out this entire week, celebrating their national holiday. Many tanners in China remain fixated on the date of December 15 because of tariff changes and will look to buy in the next couple of weeks if they have assurances that hides bought will have delivery prior to that date. That window is slowly closing.
Reports from members of the cowhide trade last week claimed producers entered the week with offer lists that were well populated. It is widely speculated that there continues to be a decent number of cowhides unsold.
It appeared as if producers’ initial intentions were to leave asking prices unchanged, as some of the most recently traded levels are at prices that, if they slip any lower, would almost force producers to take more hides to landfill.
We are unlikely to see packers ease their harvest intentions, as profitability in the packinghouse is easily at historically high levels and as long as packers can keep their labour force motivated, look for them to continue with numbers in the range of 640,000-650,000 head per week.
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