US Perspective - 08.10.19
08/10/2019
www.themaxfieldreport.com
Including last week’s USDA Export Sales Report, packers sold close to 2 million hides in the past three weeks. Last week, they insisted they were in possession of decent sold-forward positions. They appear focused on shipping as many hides to China as possible; packers want to ensure that they do not have issues with their outstanding orders, as we suspect many of the hides sold in the past several weeks to Chinese tanners were for delivery prior to the December 15 deadline when tariffs will increase.
Last week, Chinese tanners were out all week observing a national holiday; Korean tanners observed the holiday too. Tanners looked for bargains, thinking the absence of Chinese tanners might give them an opportunity to find offers at favourable levels. However, buyers bidding $2-$3 under asking prices discovered quickly that packers had no intention of negotiating prices. We heard some isolated cases of packers pushing for slightly higher trading levels last week, but quickly found out buyers had no interest in paying more money for hides.
It is likely not as many hides changed hands last week compared to the past two or three weeks and it is likely that packers did not clear their production. Prices were fully steady with the past few weeks.
Reports from members of the cowhide trade suggest traders still had offer lists that were fairly well populated last week, with a number of selections available for prompt shipment. As to asking prices, sources reported that for the most part, offers appeared unchanged from last week. Buyers of cowhides continue to target aggressively lower price ideas and, with recent trading levels hovering at levels where they are barely better than taking the hides to landfill, continue to make trading a difficult task.
One possible advantage for cowhides is that the price of some selections is so low, the increase in tariffs will add only a handful of pennies, so there need not be a rush to deliver them before December 15.
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