US Perspective - 17.11.15
Courtesy of The Maxfield Report
www.themaxfieldreport.com
Last week, the big packer trade saw offer lists pale in comparison to offers the past several weeks, as many opted not to publish “official” offer lists, while many others pared their offerings considerably.
Asking prices on the limited number of offerings appeared in line with the week prior, with the exception of HNS/BBS, as it appears producers were a bit more confident of their position on these selections and their ability to eke out additional increases.
Sources report that a number of buyers started the week with aggressive ideas and in spite of offer lists that were not as populated as the last several weeks, started the week with ideas lower than the last reported trading levels.
Early on, buyers recognised that packers were in no mind for lower ideas, which sent many tanners to the sidelines, while a limited number of tanners acknowledged the steady prices and a modest number of hides were traded.
Popular opinion of the trade is that the number of hides sold last week is likely not to equal the prior week and it is likely we will see on Thursday’s USDA Export Sales Report, sales considerably short of the slaughter.
In regards to prices, we are aware of sellers obtaining a dollar more for sales of HNS/BBS, while we also have instances of some producers improving upon their last traded levels for Super-Jumbo HTS/ BRS. All other selections were considered steady, while trading levels on heifers reflect lower prices, although there is not a consensus on trading levels on heifers.
Members of the trade report a similar tale with cowhides. The week began with some producers either opting not to offer or reducing their offer lists substantially in terms of the number of hides, while asking prices for the most part appeared in line with the week prior.
The week started with buyers willing to “test” producers and bidding prices lower. However, tanners quickly found out that producers had no intention of following their lower ideas.
In the meantime, a number of buyers needing product supposedly improved their ideas and there was a modest number of hides sold; however, it might not equal week’s worth of production, especially with harvest levels at their highest levels of the year.
Producers appear as if they were able to hold HNDC steady, while there were opportunities to improve upon their last traded levels for HNC and HBC.
THE LOOK AHEAD
As to what we expect for this week, it will be interesting to see if any of the producers have offer lists that are a bit more populated, especially considering popular opinion amongst many pundits, including your editor, is that producers likely did not sell their production the past couple of weeks.
Another variable worth mentioning is this is the last full week of trading for the month, as next week the US will observe the Thanksgiving Holiday (November 26) and it is common for much of the trade to take off early in the afternoon on Wednesday and return the following week.
In our opinion, this makes this week’s trading important, especially if it should come to fruition that sellers do not liquidate their production, as history tends to indicate that the week of Thanksgiving is not usually a busy week. If this should occur, we will see a situation where producers will enter December with the sold-forward positions not nearly as strong as the beginning of November, and this is why several pundits remain of the opinion that we could see a “sloppy” month of trading in December.
