US Perspective - 15.09.20
Courtesy of The Maxfield Report
www.themaxfieldreport.com
The holiday at the start of last week, coupled with limited offers from packers at higher asking prices, are being blamed by most pundits for the general lack of interest.
Packers continue to lay claims of strong sold-forward positions, which led to their efforts last week to achieve higher trading levels, although volumes appeared limited. Achieving increases was not nearly as easy for packers as in the past several weeks, leading to thoughts by some members of the trade that prices are a bit “toppy”.
It is highly unlikely that packers sold their production last week, but hides changing hands were traded at levels roughly a dollar higher than the last concluded business, while some selections reflected slightly higher increases.
Popular opinion is that there is a substantial overhang of unsold wet blue in the US.
It was a lacklustre week of interest for cowhides last week too. Producers expressed no interest in countering the unsolicited bids from prospective buyers, while buyers attempting to submit bids at levels lower than the asking prices found producers unwilling to negotiate.
The traditional slowdown in beef demand following the Labor Day holiday (September 7 this year) will likely not be as severe, as export demand for beef remains unprecedented and it is likely we will see numbers similar to August’s.
Producers continue to possess strong sold-forward positions; it is likely that we will continue to see only a limited number of selections offered. What will be interesting in our opinion is to see if producers will attempt to raise their asking prices again this week, especially keeping in mind the increases in resistance they saw to higher asking prices last week.
We continue to hear reports of customers pushing producers to ship product much earlier than contracted. Following shipments is an excellent indication of how business is for tanners and, considering the shipments we have been seeing the past few weeks, we are leaning towards the opinion that leather business is better than tanners have been indicating.
