US perspective — 07.03.08
11/03/2008
The Jacobsen Commentary and Market Opinion —
07.03.08
Courtesy of www.thejacobsen.com
There has been no significant change in big packer hides since our report last week as the majority of ideas from buyers remain quite a good distance from where packers would like to sell. Overall, we would call last week’s trading no better than average, supported by today’s report that packers were able to sell roughly 475,000 wet-salted hides last week.
As far as prices were concerned, we are still seeing a two-tiered market, as those buyers who are able to buy for prompt shipment are able to negotiate price, while those looking to buy for the advertised shipment on packers’ offering lists are having a difficult time persuading packers to lower their ideas.
Trading levels last week are indicating that HNS are trading in volume around $65, although there are isolated reports of prices as high as $66, while HTS have traded in volume last week at $64.50 and Bs at $63.
As it pertains to BBS, we have heard levels of $64–$64.50, while CBS appear to be struggling and only able to achieve as much as $61, while HNDS are hovering around the $65 level. Offers of heifers continue to be difficult to come by and the few offers we have seen appear to be moving quickly at levels of $58-$59 for HNH and $56–$57 for HBH.
Interest in cow hides this past week was very similar to that of their grain-fed cousins, as buyers relentlessly continued to try and convince producers to accept less money. Overall, we would call prices unchanged from their last levels and we would call HNDC roughly $56, HNC $52 and HBC at levels close to $43. Meanwhile, interest in bulls remain decent with natives achieving levels around $60 or slightly better, while brands are hovering around the $55 range.
In the meantime, the nation’s slaughter is on the brink of moving higher with Easter and warmer weather fast approaching. In fact, beef demand during the Lenten Holiday season has been better than anticipated and this has allowed packers to finally push their margins into the black (roughly $10 per head). Looking ahead, considering that cattle on feed is at its second-highest levels in history it is reasonable to suspect we can see some huge slaughter numbers come the second half of April through June.
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