US Perspective—16.12.08
The December 4 ended sales reported by the United States Department of Agriculture (USDA) for hides and wet blue totalled 1,123, 000, exciting many traders. Some are convinced that this huge buy is a sign that the freefall is over. Other purveyors are not quite ready to declare an end, but think it is very near. Buyers certainly have an interest in taking advantage of unprecedented bargain prices. Recent drops in steer markets alone represent nearly $0.50-$0.70 a foot in reduced manufacturing costs.
Exports for the same week for hides and wet blue totalled 473,100, a big drop of 147,900 pieces under last week’s kill of 621,000. In order for the market to begin its healing process, the overhang of inventory will need to move at a more impressive rate than it is at present. It is critical that last week’s impressive sales figures translate to shipments. This is something that will be closely watched in the coming weeks as a sign of recovery.
