US Perspective—19.11.19
19/11/2019
www.themaxfieldreport.com
Last week in the big packer hides market we saw packers in possession of offer lists that did not appear different from the past few weeks. Most still had a fair number of selections they were looking to sell. The majority of hides offered did not reflect much of a change from the past few weeks; packers continue to insist they enjoy decent sold-forward positions. The most noticeable change was in shipping times. Shipping times on hides offered moved out to late December or January for shipment.
Trading levels last week were no worse than steady, while it appears packers continue to meet considerable resistance from buyers any time they start to talk about higher prices. Sales were slightly lower than the week prior and if these assumptions are correct, would be the third consecutive week of sales falling slightly lower than harvest numbers, which does not appear to be much of a concern for packers.
Reports from Asia claim tanners in the northern part of China have been especially active over the past couple of weeks, buying large numbers of cowhides. The downside of this activity are rumblings that the drop split and gelatine market appear as if they are saturated.
Last week was a fairly successful week of trading for most, with trading levels at no worse than steady, and perhaps slightly higher.
We are entering one of the last full weeks of trading we will have this year (overall there are only four full weeks of trading left in the US in 2019). Packers are enjoying some of their most lucrative margins of the year and with thoughts that there are plenty of cattle standing available for harvest, there is support for arguments that we could see one of our largest harvest weeks of the year this week.
Keeping this in mind, we continue to lean towards the opinion that those selling hides likely have “marching orders” from upper-management to keep selling into this market, in order to keep sold positions “fluid” and avoid letting sold-forward positions dwindle. That said, over the course of the past three weeks, we have seen sales fall slightly short of harvest numbers. It will be interesting to see if those selling hides can keep their new-found momentum moving forward.
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