US Perspective - 15.07.08
The Jacobsen Commentary and Market Opinion—15.07.08
Courtesy of www.thejacobsen.comPrices of big packer hides in the US moved incrementally higher again last week as packers were making claims to have sold HTS earlier in the week at $68 and, by the end of last week, were readily passing bids at that figure.
This week, there are rumours that a few of the packers may have obtained as much as $69 for HTS; however, the highest number we can attest to as of this writing is $68.50. Meanwhile, the rest of the big packer selections are reflecting higher levels with HNS reaching as high as $69, BS at $67 and BBS at $68 this week. Interestingly enough, heifers have failed to see any real increase in prices as we are still gathering reports of HNH trading at $59 and HBH at $57.50.
In spite of a firmer big packer market, cow and bull hide prices continue to suffer. You don't have to look too hard to find parties with some rather bearish sentiments on the market. As far as trading levels are concerned we have reports that HNDC are struggling to reach $55 this week, while HNC are doing well to trade above the $50 level. Meanwhile, HBC continue to be the most problematic as we continue to hear there are more than ample supplies of this selection for sale and if sources are correct, it may be difficult to sell this selection in volume above $40.
Interest on bull hides is also coming to a halt as we are hearing reports from some producers who claim they have not see any real interest on bulls for the last two or three weeks, while some producers are reporting that the few ideas they have seen are easily $2 or $3 lower than their published asking prices. In the meantime, we have been able to come across a few isolated reports of trading with natives checking around the $58.50 level, while Brands appear no better than $52. Meanwhile, small packer hides are trading around $49, while asking prices on kip skins are as high as $51 with no takers.
Big packer margins are approaching $100 per head and this is encouraging packers to try and run as much volume as they can through their facilities leading some pundits to forecast that we could see the largest slaughter of the year this week (719,000 head was the previous high). Packers appear to be sold ahead well enough for the extra volume not to be any problem.
