US Perspective - 5.5.15
Courtesy of The Maxfield Report
Last week packers made every attempt to try to hold prices in check with the week prior. Reports had some packers refraining from offering wet-salted hides and only wet-blue hides, while other packers opted only to offer some of their cowhide selections.
As far as asking prices were concerned, those who offered priced hides at levels equal to the week prior. However, by the middle of the week some sellers recognised they were fighting an uphill battle with the May Day Holidays looming at the end of the week. According to sources, those concluding business sold hides at levels $1-$2 lower than the last reported trading levels.
With regards to trading levels, we hear that HTS sold in volume at $89-$89.50 delivered, while sales of BS were at equivalent levels. Meanwhile, we are aware of sales on BBS $100-$101 delivered, while sales of HNS took place at $102-$103 delivered. In the meantime, as it pertains to volumes sold, we are not certain if there were enough hides sold last week to clear the slaughter - the second-largest slaughter of the year.
Members of the cowhide trade report a difficult week of trading. Sellers started the week with mixed offers, as those who tend to price their hides higher than their competitors were reported to have lowered their ideas, while others producers opted to leave prices unchanged from the week prior.
Like events in the big packer trade, the week got off to an uneventful start and by the middle of the week, it became clear that producers were interested in concluding business and unlikely they were going to convince buyers to pay steady levels. As to trading levels, prices were $2-$3 lower, while there are plenty of questions as to if producers were able to liquidate their production.
THE LOOK AHEAD
As to what we expect this week, we tend to suspect we are going to see more of the same. Overall, buyers do not appear as if they are motivated and the majority of buyers appear as if they are willing to listen to offers, but waiting for the “special” deal.
In the meantime, we suspect producers as a group do not possess the sold forward positions they did six to eight weeks ago. This, coupled with requests to delay shipments, buyers unable/unwilling to open letters of credit and an increase in the number of claims being filed on shipments of more expensive hides, leads us to suspect most members of the trade will be busier dealing with “agitations” than selling hides.
That is why, until we start to see buyers enquiring about shipments, we would continue to sell into this market to protect our overall position.
