The world stock markets ended the week on Friday with some much needed gains on the heels of the Bank of Japan’s decision to move to a negative interest rate. With a less than stellar start to the week in the Chinese stock market, it was a welcome sight to see Friday end slightly up. Unfortunately, this improvement was not enough to overcome the big losses in the beginning of the week. One could say that the hide market followed a similar path this week. At the beginning of the week tanners were bidding well below last week’s levels but by mid-week the tanners who needed to fill some of their raw hide needs were getting closer to sellers ideas. By the close of the week business was concluded between sellers and buyers who showed willingness to compromise and, just like the stock market in China, the market price was improved from Monday’s ideas but not enough to mirror last week’s prices.
We would call the prices for U.S. Steer hides as follows: $72.00 for Heavy Native Steer hides, $69.00 for the Butt Branded Steer hide selection and we would put the regular weight Heavy Texas Steer hides at $62.00 to per piece, all FOB plant basis. All these prices are on what would be seasonal/regular weight range hides. Packers still continue to produce mainly jumbo weight selections due to heavier than normal cattle. The spread between jumbo and regular weight steers has shrunk largely in part to the larger production of jumbo selections. We are still seeing good demand for U.S. cow hide selections but tanner’s price ideas were below last levels. As the week went along buyers and sellers were able to get closer on price, and by Friday business was concluded at steady prices. Just like we have seen for the last few months, the demand for U.S. cow hides, and especially Dairy Cows, is coming mainly from the upholstery tanners. The U.S. Plump Native and Branded Cow hides that were sold last week were all sold at steady levels.
The Export Sales Report released by the USDA on January 21, 2016 for the week ending January, 14, 2016 showed net sales of 565,000 cattle hides and wet blue equivalents. That number was up 109,400 pieces from the previous week’s total of 455,600 pieces sold. China was again the top buyer reportedly purchasing 291,300 total units, Korea limped across the finish line in second place purchasing 64,800 total units.
The Federally Inspected Slaughter (FIS) for the week ending Saturday January 29, 2016 was estimated to be 567,000 head which was almost identical to the previous week’s slaughter of 569,000 head. For the same week last year the FIS was 568,939 head.
As we enter the period when most all tanneries are closed for CNY we would not expect there to be much activity coming out of Asia. The biggest task this week for U.S. hide suppliers is to work to get letters of credit opened before the banks close for the official holiday from February 7th to the 15th. There will continue to be a softer trend this week for big packer steers and tanners will likely use the upcoming holiday as a way to try to get the market down even further. Most suppliers of U.S. cow hides find themselves in well sold ahead positions so they should be able to keep the cow market on solid ground. The slaughter in the U.S. is expected to remain lower than we saw last year at this time which should help keep prices from falling as low as tanners would like to push them. Overall we do not expect very much excitement in the coming weeks with most of Asia on holiday and a sluggish leather market.
Mulligan’s Laws
You can hit a 2-acre fairway 10% of the time, and a 2-inch branch 90% of the time.
Nonchalant putts are the same as chalant putts.
It’s a simple matter to keep your golf ball in the fairway if you’re not too choosy about which fairway.
