The big news last week was the results of Tuesday’s U.S. Presidential election. It was a big surprise which many did not expect when Mr. Trump was named the winner. While the election results sent financial markets outside of the U.S. scrambling, we slept here in the U.S. Things settled down a bit when trading opened at the New York Stock Exchange on Wednesday morning, and stocks moved higher. As the week progressed, the U.S. dollar strengthened against all major currencies. The financial markets at least until now surged as many investors were comforted by President-elect Trump’s victory speech remarks. While all this excitement was going last week, the U.S. Steer and Cow hide markets remained basically steady. Did sales slow? Yes, but that for a large part, may have been because tanners and suppliers could not come together on price. U.S. hide sellers who appear to be well sold ahead of their productions, showed no interest in bids that did not at least come up to the levels of their most recent sales. Tanners, who have better raw material ownership after their weeks of buying, were in no mood to pay higher prices than their last purchases. We expect that last week’s increase in the value of the U.S. dollar also affected the tanner’s enthusiasm to buy U.S. raw material. There were rumors of some packers being able to move Butt Branded Steer hides at prices that were up $.50 to $1.00 per piece, but those sales if they did occur, were limited. Many of the smaller Asian tanners contend that they do not have leather orders they need. There have been fewer orders around, and the larger tanners have grabbed them all up. All this leads us to calling last week’s U.S. hide market steady priced, and thinly traded. In our opinion, last week’s FOB plant prices for seasonal average weight Big Packer Heavy Native Steer hides remained unchanged at $77.00 per piece, and Big Packer Butt Branded Steer hides also remained unchanged at between $75.00 and $76.00 per piece. As for the Big Packer Heavy Texas Steer (HTS) hide selection, we heard only that some heavier average, 68/70 lb. hides, were traded at USD 70.00 to USD 72.00 per hide plant basis. U.S. Cow hide sales, like Steer hide sales, appeared to have slowed last week. Sales prices that were reported were steady for both the Dairy Cow and Plump Cow hide selection.
The USDA’s Export Sales Report released on November 10, 2016 for sales made during the seven days ending November 3, 2016, indicated that 644,100 U.S. hides and wet blue equivalents were sold for export during that period. This is another rather large number following the 676,300 pieces reported sold for export during the prior week. Last week was the second week in a row with what we would have to call a historically high number of wet blue hide sales being reported. These numbers are said by some in the trade to be proof that one of the large U.S. wet blue tanners is and has been, cleaning house.
The Federally Inspected Slaughter (FIS) for the week ending Saturday November 12, 2016 came in at an estimated 610,000 cattle. That number is up from the prior week’s estimate of 606,000 head processed. Year-to-date the FIS is up 5.1 percent or 1,265,000 head from the year ago.
The appreciation of the U.S. Dollar may be a hurdle that U.S. raw hide and wet blue sellers will have difficulty jumping this week. One would have to suspect that the U.S. Dollar may give back some of its last week’s gains, but who knows. If not, we think it may well have some effect on what tanners in export markets can or will pay for U.S. raw material. We also expect that cattle slaughter here in the U.S. may increase a little this week, with next week being our Thanksgiving Holiday week. Historically, we see one of our highest weekly FIS numbers of the year the week before Thanksgiving. We feel that U.S. hide suppliers remain well sold ahead and therefore will not quickly accept any lower bids that come their way in the short term. The bottom line is that we expect the continuation of a steady U.S. Hide Market. Good luck and good business to all.
Golf Quote
“Thinking must be the hardest thing we do in golf, because we do so little of it.”
– Harvey Penick
