Oil kept bouncing around the $30.00 a barrel number last week and commodities in general floundered. Stock prices and equity markets around the world continued to have what analysts call “corrections”. Cattle slaughter in the U.S. picked up last week and many tanners around the world, mainly side leather tanners, continued to complain of a lack of leather orders. Through it all the U.S. hide market for all intents and purpose held its own. Plump Steer hide producers were able to move any regular weight product they wished, without any trouble, and sell at least steady price levels. There were some trades reported Heavy Native, Butt and Colo. Branded Steer hides at prices that were $1.00 and in one case $2.00 higher than steady money, but we feel those sales were very limited. We suspect that there were some trades made last week on these selections that were down $1.00 or $2.00. Therefore at week’s end we felt that we had to call the prices for the U.S. Plump Steer hide regular weight selections steady. That leaves the market price for Regular weight Big Packer quality Heavy Native Steer hides at $73.00 per piece FOB plant and Big Packer quality Butt Branded Steer hides at $71.00 to $72.00 per hide plant basis. Although live cattle weights are dropping and could affect hide weights a little going forward, there seemed to be a good number of “Jumbo” weight Steer hides available in the market again last week. It appeared that any premiums paid for these “Jumbo” hide selections was limited by historical standards. The reported sales for the Heavy Texas Steer hide selection ranged from last week’s high end price of $64.00 per hide FOB plant basis to a couple of dollars lower, so one might call the Heavy Texas Steer hide value down $1.00. All of the U.S. Cow hide selections continued to be in good demand last week. The auto and furniture upholstery leather tanners and some other users bought up the Plump Native and the Holstein Cow hides available for sale at prices that were steady to $1.00 to $2.00 per piece higher than their last traded prices.
The Export Sales Report released by the USDA on January 14, 2016 for the week ending January, 7, 2016 stated that 398,300 cattle hides and wet blue equivalents were sold for export during that week. That number was down 10,400 units from the previous week’s total of 398,300 pieces sold. China reportedly purchased 223,800 or about 58 percent of hides and wet blue equivalents that were sold during the period
The Federally Inspected Slaughter (FIS) for the week ending Saturday January 16, 2016 was estimated to be 568,000 cattle up a little from the previous week’s 550,000 head processed. For the same week last year the FIS was 550,447 cattle. Year-to-date slaughter at 1,163,136 is down 5.2 percent from 2014.
Cattle hide prices over the last month or so have hovered around the same levels, with values remaining within $1.00 to $2.00 during those four weeks, which includes the Christmas and New Year holiday weeks. Now, with only three weeks remaining before the Chinese New Year/Spring Festival holiday began it will interesting to see what kind of demand for hides and wet blue we see from the Asian tanner over the next few weeks. What do the Chinese tanners want/need to buy for shipments that would arrive after the holidays? Are there other Asian tanners, like the Koreans, the Taiwanese, and so on that have delayed their raw material buying hoping for lower prices when they feel there will be fewer buyers in the market due to the CNY holidays? U.S. Cattle slaughter is expected to remain at its current level at least through the first quarter of this year. So, with supply not changing to any degree we have to think that demand will be the determining factor as to the direction of prices for raw hides and wet blue in the short term. Have a great week.
Golf Laws
There are no little problems
There are no tiny changes
There are no small pieces of advice
