What happened this week: Trading and the market became more and more difficult to understand. The US$ hasn’t let us down this week and recovered well from the lower levels seen on the previous Friday, although it wasn’t really able break the €1.20 level. It’s still a bit of a weekly gamble to combine the bids with a favourable rate of the US$, but with the fundamentally firmer trend of the US currency it is not such a big challenge to get it right for the moment, at least. The €1.20 mark now seems to be a strong barrier in deciding where the euro is going to go in the coming weeks.

The hide market is in no better shape – at least when it comes to the question of where it is heading over the summer. If we look at the supply side then optimists are in favour of an upward trend. However, the kill is poor and there is little reason to believe that this is going to be any better in the coming months. On the demand side – which has been the driving force for any market movement in the recent past – it is a different story and difficult to guess. The reason for this is the entirely different information and positions of many sellers around the globe. This is embellished with a lot of gossip and stupid stories that leads everybody to believe what suits them best rather than what is truly happening. When it comes down to the simple hard facts of sales and business during the week then trading and interest were again predominantly focused on bulls and cheap lightweight material. Except for some regular business in Europe - that is not worth mentioning - almost all sales were generated overseas and we are still in the fortunate position of being pretty well protected by the US big packer market. If one doesn’t forecast a rising market we are in a 'good opportunity season' were German hides, in many parts of the world, can be considered a bargain. Cows did not receive too much support.

Except some bits and pieces, there was no real interest in buying in any volume was seen and if we look at the information coming from Asia, then most informed sources consider tanners to be well covered. The tales of huge inventories in the Chinese tanning business seem to be questionable at least, because L/Cs and shipping requests are plentiful and outgoing vessels will carry a decent number of our hides in the next weeks. All this can’t, however, wipe out the concerns about the tanning business in Europe.

The situation in the European upholstery business looks frightening. Apart from the season and the business as such, we are also becoming more concerned on the payment front. We are now entering the hot period where turnover drops and payments to tanners are going to be sluggish, and we would not be surprised if the financial resources here and there are not going to be sufficient.

The kill: No better really and all that one hears from the beef industry and the retailers is that there is no positive outlook for any short term improvement. Hot weather and the beginning of the holiday season do not offer any hope for an increase in beef consumption. Except minor weekly variations there is no indication of a change.

What do we expect? The coming weeks will only deliver some final pre-holiday market action in Europe. In the male section there might be a chance to squeeze some additional drops out of the market for the supply reason, but for the rest we believe it is going to be more difficult and we will again need the US$ rate as a crutch to help us to fight dwindling revenues for hides. Oil prices and general concerns about the economy in the second half of 2005 could also start to become a burden as well.

Type	Weight range	Avg. green weight	Salted weight	Avg. weight salted	Price per kg green weight	Trend
Ox/heifers	15/24,5 kg	22,0/23,5 kg	13/22 kg	20/21 kg	€ 1,55	Steady
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,35	Steady
Dairy cows	15/24,5 kg	22,5/23,5 kg	13/22 kg	20/21 kg	€ 1,50	Steady
	25/29,5 kg	27,5/28,5 kg	22/27 kg	25/26 kg	€ 1,30	Steady
	30/+      kg	33,5/35,5 kg	27/+   kg	29/31 kg	Share this story: Leatherbiz.com cannot be held responsible for content if the language setting is changed from English. The translations provided by Google Translate are automated and therefore might not be accurate and may contain incorrect, offensive or misleading language. We offer this facility as a guide only.