What happened this week: There were quite a few interesting developments during the week. Asia continued to remain an active player in the market and a good number of cows, ox/heifers and thirds have been sold to that destination. Ok, prices have to be what the market is in comparison to the competing markets (USA), but the demand is back also with quick shipments. The USD assisted as well. This is good news considering that the European tanners are already starting to prepare for their Xmas holidays, having finished their programs for the year and are quite relaxed about their raw material supplies for January and February. This applies mainly for the large program buyers of bull hides. Since one of the key players in the continental European has decided to cut a larger part of the production of bulls and to substitute with other materials a surplus of bulls has appeared on the market for some time already.

With the better kill of the last weeks combined with the reduced demand/soaks bull tanners feel now to be in the ‘drivers seat’ as far as the program businesses are concerned which are due for renewal in the next weeks. That prices for South German material have to decline is pretty obvious since they have been fixed for the past 2 months and require adjustment, but the big question is, if an additional correction can be justified and obtained.

 So, in general the markets follow nicely the expectations one can have analysing the price index charts. They display a fair value at present for cows while bulls had been above the trendline and return now into the frame to be expected after the spread between cows and bulls became too wide. Watching now the return of the Asian buyers to the market we have to assume that with prices for standard cows being below $50,00 Asian tanners find a margin again and don’t gamble on further declines. It has, however to be mentioned, that the activity has not come from the garment but only from furniture upholstery. Also some more inquiry for ox/heifers has been seen, although many try to talk the shoe leather business down. We do not agree as far as the world market and higher substances are concerned. We can only find a decline in the interest for light material and substances which had been so much in fashion earlier this year.

The kill: After the declines of the past weeks we saw a sharp increase this week. We don’t have any reason for this development, but it seems that it will continue also next week and the kill could well stay high until week 51. As already reported has mainly the kill of males nicely recovered.