US Perspective—02.09.08
03/09/2008
The Jacobsen Commentary and Market Opinion
Courtesy of www.thejacobsen.com
US big packer hides remain unchanged for the most part since our last report, in spite of perception by a substantial majority of the trade that prices appear a bit over-valued.
In the meantime, what is allowing packers to hold prices steady are a few Chinese and South Korean tanners, who still appear to need hides for shipment within the next 2–4 weeks and packers are making sure to advertise these trades. However, the opinion of the general trade is that packers are hard pressed to obtain these prices in any kind of volume.
Trading levels over the past week are quoting HNS ranging from $68–$68.50, while HTS still appear able to bring levels of $67, with BBS just a step behind at $66.50 and BS somewhere around $65–$66. Meanwhile, there appear to be more than adequate supplies of heifers for sale, with prices checking in around $58 for HNH and $56 for HBH.
In the meantime, the nation’s slaughter is running close to levels of a year ago, in spite of perception that cattle supplies would tighten as we move into the fall season. Worth noting, though, is that the number of cows and bulls coming to slaughter are averaging approximately 20,000 head a week more than a year ago and this, coupled with lacklustre demand for cow hides, is plaguing those attempting to move cow and bull hides.
Reports today surrounding cow hides are citing that some of the parties have finally succumbed to the lower ideas of buyers, leading to rumours that HNDC are no longer able to trade with a ‘5’ as the first number, while HNC are struggling to maintain the mid-$40 level, and HBC appear to have moved into the lower $30s. Trading on bull hides appears lower,and there are also rumblings that Natives will do well to bring levels in mid $50s, while Brands will more than likely slip below the $50 level this week.
Short-lived growth in the US
The US economy expanded at a faster pace than previously estimated in the second quarter, helped by growing exports and a smaller decline in inventories. The 3.3% annualised increase in gross domestic product from April through June was higher than forecast and compares with the advance estimate of 1.9% issued in July, the Commerce Department in Washington has said. The economy grew by 0.9% in the first quarter.
Record exports and the temporary stimulus from tax rebates prevented the economy from stalling as housing slumped and companies cut expenditure. Consumer spending is now waning and slower growth abroad dims the outlook for overseas sales, suggesting, according to Bloomberg, that the last quarter will be the year’s highpoint.
The number of US citizens collecting unemployment insurance has risen to the highest level in almost five years, a sign that companies remain reluctant to hire. The number of people filing first-time claims for unemployment benefits decreased by 10,000 to 425,000 in the week ended August 23, from 435,000 the week before. The number of people staying on rolls rose to 3.4 million, the highest since November 2003. Companies are trimming staff and freezing hiring plans as demand softens, forcing workers to stay on government assistance, Bloomberg has said. Rising unemployment heightens job-security concerns and contributes to a slowdown in consumer spending, which accounts for more than two-thirds of the economy.
Share this story:
