THE HIDE MARKET – MAY 30, 2016
Enough U.S. Steer hides were sold last week to keep suppliers in well sold ahead positions on all of their Steer hide selections. In the process sales prices on all the Steer hides moved higher. Heavy Native Steer hides sold up at least $1.00 while Butt Branded Steer hides were reported to have sold at levels that were up by as much as $2.00 per piece. The Heavy Texas Steer hide value, which has been hard to determine over the last few months, had sales reported that were up $2.00 per piece on average from the previous weeks reported levels. Tanners throughout Asia continued to report that leather business is not good, couple that with the currently lower split prices, and it’s hard to justify higher hide prices. While, they admit that there is good demand from the auto sector, tanners of this product claim profits are very marginal. Other negatives to higher hide values are that this is the time of year when tanners in China are working on renewing their lines of credit with their banks and that slows the tanner’s ability to open L/C’s in a timely manner. Unfortunately for tanners, none of these reasons resulted in a lower hide market based off last week’s sales prices of U.S. hides. We are calling the FOB plant value of the seasonal average Big Packer Heavy Native Steer hides minimum $74.00 per piece, and the seasonal average Big Packer Butt Branded Steer hides $73.00 per piece. The trading range on the Big Packer seasonal average Heavy Texas Steer hide selection has now moved up a big step to $66.00 to $70.00 per piece FOB plant. There was also a good amount of U.S. Cow hides traded last week. The plump Cow hides, both Native and Branded held their sale price levels last week but it appeared that some of the lesser desired origin Dairy Cow hide selections lost $1.00 in value. Word around at the end of last week was that many U.S. Cow hide suppliers sold well forward, having moved a good volume over the last couple of weeks.
The Export Sales Report released by the USDA on May 26, 2016 covering the week ending May 19, 2016 stated that 657,600 hides and wet blue was sold for export during the period. This number is up over 90,000 pieces from the previous week’s sales number of 567,000 units. China reportedly booked 348,700 pieces or about 53 percent of the sales reported for the week. Korea was the second biggest buyer with 124,000 raw hides and wet blues purchased.
The Federally Inspected Slaughter (FIS) for the week ending Saturday May 28, 2016 came in at an estimated 586,000 cattle. This number is almost identical to the prior week’s estimated 587,000 head harvested.
This will be a shortened week here in the U.S. as we observe of our annual Memorial Day holiday. One has to expect higher asking prices from all U.S. hide suppliers this week for any items they have to offer. If tanners have not filled their immediate needs they most likely will have to follow sellers higher asking prices to secure any raw material they need to purchase. Are hide prices primed to make a sizable move higher in the near term? When we look at today’s U.S. hide prices versus last year’s levels at this time, we could say there is indeed room for an upward thrust. Although slaughter numbers in the U.S. are expected to stay around their current levels, which are running near 2 percent ahead of last year, unless demand improves we can’t expect much of a change in hide prices. Demand is the key to where hide prices are headed.
Mulligan’s Laws
If your driver is hot, your putter will be ice-cold
If you can hit your irons, you will top your woods
If you are keeping your right elbow tucked in, your head will come up.
You can hear thunder a hundred miles away when you’re three holes down with three to play.
