US Perspective - 20.05.08
20/05/2008
The Jacobsen Commentary and Market Opinion—20.05.08
Courtesy of www.thejacobsen.com
Interest and sales in the US slowed last week and looking at the most recent USDA export sales report, sales fell well short of the levels reported the week before. Meanwhile, we did hear from a number of sources that there was more than adequate interest for packers to consider last week; however, it appeared the majority of interest continues to fall below the last traded levels and it did not appear packers were in any hurry to chase the business.
Current trading levels in the US on big packer hides reflect this; $67.50 is still possible for HTS, while packers would like to sell more HTS at $67, they appear to have no interest in bids at $66 this week with most of the opinion that $66.50 could buy HTS.
Meanwhile, BS can be bought at levels of $65, while we have heard that BBS have traded at $66 and CBS at $64. On heifers, although it is evident the number of heifers in the mix is on the rise, we have confirmed trading at level of $60 for HNH and $58 for HBH.
As it pertains to cows, interest in HNDC remains fairly decent with reports that the majority of trading appears around the $57.50 level, with a few isolated reports of a producer or two able to secure as much as $58.50–$59 for better quality material. In the meantime, interest in HNC appears adequate to hold prices steady at $54, while HBC are trading at levels of $45-$46.
Interest in Bull hides remains good with sales reported to China as high as $74 delivered and this is translating to prices as high as $64 for Native Bulls, while Branded Bulls appear to be lagging a bit as we have reports only around $55.50.
Meanwhile, the government-imposed closure of tanners around the Beijing area prior to the start of the Olympic Games is taking its toll on lower grades as we hear sellers of machine-damaged number threes and render hides are struggling to find homes, while we have reports that small packer hides as also softer with a report that sales have taken place at $48.50.
With regard to the nation’s slaughter we have now seen three consecutive weeks of 700,000 head slaughter and the opinion of pundits is this will more than likely continue to the next several weeks—with the exception of the week of May 26, which will see the US observe its annual Memorial Day Holiday—as packers are reporting decent profits.
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