US Perspective – 16.06.20
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Last week in the big packer trade, offer lists were not as heavily populated as many pundits thought they would be. Packers continued to lay claims of possessing decent sold-forward positions. Worth noting, these claims were backed up last week when the USDA released its weekly Export Sales Report which listed combined sales exceeding 900,000 hides.
There was not as much interest as the week prior, while buyers continued to bid prices anywhere from $1 to $3 under the last reported trading levels. In the meantime, packers were reported to be countering bids last week at full asking prices, refusing to negotiate prices.
The majority of the bids last week saw buyers looking to buy limited quantities, leading to thoughts that it is highly unlikely that packers sold a week’s worth of product last week. Prices were no worse than steady, while attempts by packers to sway buyers to consider higher prices were met with a considerable amount of resistance.
Elsewhere, members of the cowhide trade claim producers entered last week in possession of offer lists that were fairly well populated. The majority of producers appeared as if they had a full complement of selections for sale, as well as substantial numbers of loads for sale. Producers opted to leave asking prices unchanged, as many producers were on record claiming that trading levels on some selections are so low that any further price reduction would make it unfeasible to continue to produce.
The question on everyone’s mind moving forward is if packers can keep their workforce healthy, as there is plenty of margin in the packinghouse these days and more than ample numbers of cattle standing.
We suspect that there are more than a few producers who will be pressing customers to take delivery of their outstanding hides, as shipments have been falling well short of the harvest the past several weeks.
Elsewhere, the easing of restrictions has had mixed results, as there are some states that are seeing a spike in COVID numbers, while other states are posting numbers that continue to trend lower. Where restrictions have eased, there are reports of consumers out and spending money, which is desperately needed if we are going to see demand improve.
