US Perspective - 18.7.15
18/08/2015
www.themaxfieldreport.com
Reviewing the events of last week, sellers (packers / traders) started the week with few hides, if any, to offer. Sellers willing to publish offers raised ideas by roughly $2-$3 per hide and buyers quickly found out that sellers did not intend to succumb to ideas below asking prices. In the meantime, there were numerous reports of unsolicited bids, while these buyers quickly discovered sellers did not intend to extend their sold-forward positions at steady levels.
Overall, popular opinion of the trade is that there was only a modest number of hides sold last week and that it is unlikely sellers sold a week’s worth of production. In the meantime, we continue to hear complaints from traders that packers are unable or unwilling to meet their shipping requests, which will have us looking for some larger shipments numbers on the weekly USDA Export Sales Report the next few weeks.
As far as trading levels, we have heard sales on HNS at $75 with unconfirmed rumblings of sales at even higher levels, while BBS sold at $73 early in the week and $74 later in the week with unconfirmed rumours there were sales possible at even higher levels.
Elsewhere, sources claim HTS/BS sold at levels of $67-$68 in modest numbers last week, while there were some isolated opportunities to sell as high as $70, which found their way to our price guide. Other trading claimed CBS sold at $66, while HNH sold at $60 and HBH as couple of dollars back. Meanwhile, we had reports of Jumbos and Super-Jumbos bringing more money, but many questions as to whether improvements were as much as reported (as much as $10 over the last reported trading levels).
In regards to trading, we have a couple of sales that were pending from the weekend as we have sales of regular weight HTS at $68, while a sale on BBS was reported at $74.
Meanwhile, reports from the cowhide trade claim that like sellers in the big packer trade, there were not many offers to work with last week, as the majority of producers were laying claims to decent sold-forward positions. According to sources, those willing to offer had higher prices ideas, with the vast majority of sellers looking for at least a $1-$2 higher than trading levels the week prior.
Overall, sellers likely did not sell their production last week, while the few hides that did change ownership likely sold at levels $1-$2 higher than the preceding week.
As to trading levels last week, we heard HNDC selling at levels of $60, while there are rumblings from some that sellers achieved even higher levels. Meanwhile, HNC sold at $46, while trading on HBC reflected levels roughly a dollar higher for product out of the north ($44) and south ($42).
In regards to trading, we have only a single sale to share as we have processors selling HTS at $65.
THE LOOK AHEAD
As to what we expect this week, we are already aware of some members of the trade travelling in Asia and this is likely to mean at least those organisations are unlikely to offer this week. In the meantime, most sellers continue to lay claims on possessing strong sold-forward positions, and if any of the respective sellers will offer this week, we suspect that they will have their sights set on obtaining even higher prices.
In the meantime, tanners facing a twofold problem: 1) leather orders are not as plentiful as a year ago and 2) leather buyers are aware of lower hide prices and are looking for concession on leather prices.
Meanwhile the impact of the devaluation of the Chinese yuan is yet to be determined; however, it is reasonable to assume that it is likely not positive.
That said, with the All China Leather Exhibition in Shanghai two weeks away, we look for the firm tone of the market to continue leading up to the start of the fair.
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