US perspective — 01.04.08
01/04/2008
MARKET INTELLIGENCE
The Jacobsen Commentary and Market Opinion
Courtesy of www.thejacobsen.com
This week’s statistics have shocked the trade. The latest USDA report shows that 727,500 wet salted hides, with another 150,500 wet blue hides were sold, pushing the current outstanding sales number to better than 5.3 million hides, which is the highest it has been since may of 2006.
As of today’s report, we have now sold almost 1 million more hides than at the same time last year, with 2.5 million hides (wet salted and wet blue) alone sold the last three weeks.
What is interesting about the export sales numbers this week is there is not a single person in the trade who had any idea such a large number of hides would be sold last week, which only refreshed claims by the naysayers who often question the accuracy of the report and the integrity of those reporting.
In the meantime, the US big packer market has taken on a much firmer tone over the past two or three weeks and this has given packers the opportunity to achieve some incremental increases on their various selections, although the vast majority of the trade is still questioning how much volume can be sold at the higher levels.
Trading levels we have seen over the last week include as much as $67 for HNS, $66.50 for HTS, $66 for BBS and $65 for BS. Meanwhile, cow-hide producers are also saying they have been able to obtain some incremental increase this week as we have reports of HNDC as high as $58.50, HNC at $55 and HBC at steady levels of $45. Other trading on bulls hides is indicating producers have achieved levels as high as $62.50 on Natives and $57 on Brands.
Meanwhile, packers have only been able to hold box prices steady during the past week, in spite of the slaughter levels that have come in lower than expected, as thoughts that beef demand might improve after Easter have yet to come to fruition. In fact, it might very well play out that we will follow our past history and we will not see a significant spike in the nation’s slaughter until the period between weeks 16 and 19. That means we could still be anywhere from two to four weeks away from higher slaughter numbers.
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