US Perspective - 13.05.08
13/05/2008
The Jacobsen Commentary and Market Opinion
Courtesy of www.thejacobsen.com
Most would have called the levels of interest in the US last week nothing spectacular; however, the most recent export sales report from the Department of Agriculture would tend to indicate otherwise. We saw a year high of 834,900 wet-salted hides sold last week, with another 124,500 wet blue hides sold. Obviously such a large sales number shocked the substantial majority of the trade as the people we spoke to found it hard to accept that a million hides sold last week.
Also interesting was the fact that we have seen some incrementally lower trading levels the past few days and this of course in contradictory to the fact that we now supposedly have more than 6 million hides sold but not yet shipped.
As far as trading levels are concerned we are seeing levels of $65.50-$67.50 for HNS depending on how heavy and what part of the country you are in, while interest on HTS is not matching the asking prices being sought by packers at $67, but we have heard of sales around $66 and rumours that some prompt business was done at $65.
Meanwhile, reports on BS peg this market at $65, while heifer selections are feeling their usual seasonal downturn due to increased supplies and we have reports that HBH are struggling around $56 and Natives at $58.50.
Meanwhile, interest on cow selections appears adequate to hold levels steady with last week as we hear that HNDC are bringing levels of $56.50-$57, while HNC are trading around $54 and HBC at $45-$46. In the meantime, Bulls continue to be easy to sell as demand remains strong and this has prompted sales on Natives as high as $64 and $59 for Brands.
As it pertains to the nation’s slaughter, we have seen two consecutive weeks of 700,000 slaughter levels and this has certainly had at least some impact on sold forward positions of producers. This, we believe, is why at least a few of the packers appeared a bit more willing to listen to bids this week and last. In the meantime, it is expected these slaughter levels should continue for the next few weeks as there appears to be a more-than-ample supply of market-ready cattle. Considering the cost of feed we cannot imagine cattle feeders will be too willing to hold onto their animals.
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