Lots of rumors and claims have been thrown around about a large volume of hides and wet blues being traded by U.S. hide sellers traveling in Asia last week. Rumor also has it that some of those trades, mostly Steer hide selections, were being done at price levels that would be called at least $2.00 or more under last traded levels. Again, those were rumors and the truth will be known eventually. It seemed there were a decent number of hides sold from supplier’s offices here, and those trades were for the most part done at prices that were down $1.00 to a maximum of $2.00 per piece. We feel there was a decent amount of hide business done last week. Sales were not as large as the week before last when the sales numbers were near a week’s production. Although they were down from the previous week, the Chinese tanners remained active buyers of U.S. raw hides. In spite of the fact that tanner’s continue to complain about the lack of leather orders, there was more buying interest from the Korean tanners last week than we have seen in a number of weeks. Some in the industry feel that the recent sales numbers are a little deceiving in that they are not reflecting the lack of leather orders. Rather, sales are the results of tanners making purchases of raw hides that will be shipped in January, for the purpose of avoiding winter hide problems they think will arise on shipments in February. This we believe may be part of the current demand for U.S. raw hides. We also think that there are some leather orders out there that tanners in Asia need to buy raw material to cover. Last week’s U.S. cattle slaughter as expected, remained above the 600,000 head number. We do expect this number to decline somewhat over the next few weeks because of the coming holidays and shrinking profit margins for U.S. packers. We are putting the FOB plant market prices for seasonal average U.S. Big Packer Steer hides at the following levels: Heavy Native Steer hides at $75.00 to $76.00 per piece, Butt Branded Steer hides at between $71.00 and $72.00 per piece, and the Heavy Texas Steer at $68.00 per piece plant basis. Interest in U.S. Cow hides remained satisfactory, and we would have to call the price levels on all the U.S. Cow hide selections steady. The Dairy Cow and Native Plump Cow hide prices continue to be sustained by handbag and furniture upholstery leather orders. Branded Plump Cow hide prices on the other hand are finding buyer interest because their market prices are at low levels.
The USDA’s Export Sales Report released on December 8, 2016 for sales made during the seven day period ending Dec. 1, 2016, stated that 493,400 U.S. hides and wet blue equivalents were sold for export during that week. This number is up dramatically from the 215,400 units posted as sold for export during the prior 7 day period. Not included in last week’s above reported number were 101,200 wet blue hides that were reported sold for 2017 delivery.
The Federally Inspected Slaughter (FIS) for the week ending Saturday December 10, 2016 was estimated to be 611,000 cattle, down just slightly from the prior week’s 616,000 head. For the same week last year the estimated FIS was 580,000 head. Year-to-date the FIS is up 5.6 % or 1,515,000 cattle from a year ago.
We don’t have a clue as to what level U.S. Steer hide prices will continue their slow decline this week. This week’s U.S. Cattle slaughter number should remain above the 600,000 head number before moving lower the following two holiday weeks. Tanners of U.S. hides have covered some of their needs over the last couple of weeks, but our feeling is they are still not long on inventory. We also feel that most U.S. Steer hide suppliers sold ahead positions have shrunk from where they were a month ago. We do not we believe suppliers will forced to sell product at reduced prices if at all. From what we can tell, all U.S. Cow hide producers are in comfortable sold ahead positions. Therefore, we see the prices on all Cow selections to remain at least at steady levels. May the force be with you.
Mulligan’s Laws
In the club house:
You can’t get to the bathroom without taking off your spikes.
There are nicer towels on the ballwashers.
