Market Activity & Analysis
The hide market this week is largely unchanged with activity in the States noticeably down as supplier representatives meet with customers ahead of the ACLE. A few reports from overseas indicate some limited trading at steady levels has been done.
A number of tanners are reporting reduced leather prices on recent blanket orders, some probably based on the low early-summer hide prices. With the current hide market several dollars higher, tanners are pushing back to align hide prices with new leather prices. Sentiment remains mixed on the post-leather fair hide market with many buyers banking on a rollback. Meanwhile, suppliers are trying to hold the line with some thinking the top-tier hides will remain firm and increase.
Cured Hide and Wet Blue Export Sales Recap
Today’s USDA export report for week ending August 15, showed cured hide and wet blue sales increased 8.1% to 422,513 from 390,747 and shipments dropped 19.4% to 475,342 from 589,568 the prior week. The same week slaughter was 654,000 head with both sales and shipments trailing production and sales considerably below hides generated for the third consecutive week. For comparison, the average year-to-date weekly slaughter is 629,309, export sales are 537,183 and shipments are 540,825.
The day was a little more active with a modest number of packer and processor sales quoted. Prices were mixed but close to previous reports.
USDA Hides and Skins Report
Net sales of 336,200 pieces reported for 2019 were up 6% from the previous week, but down 15% from the prior four-week average. Whole cattle hide sales totaling 333,800 pieces primarily for China (157,000 pieces, including decreases of 4,200 pieces), South Korea (76,300 pieces, including decreases of 10,900 pieces), Mexico (49,300 pieces, including decreases of 800 pieces), Taiwan (22,400 pieces, including decreases of 100 pieces), and Indonesia (11,200 pieces, including decreases of 1,400 pieces). Exports of 352,800 pieces reported for 2019 were down 19% from the previous week and 20% from the prior four-week average. Whole cattle hide exports of 348,900 pieces were primarily to China (192,100 pieces), Mexico (61,200 pieces), South Korea (43,200 pieces), Thailand (17,900 pieces), and Indonesia (16,800 pieces).
Net sales of 88,700 wet blues for 2019 were up 23% from the previous week and 21% from the prior four-week average. Increases primarily for Vietnam (31,300 unsplit), Thailand (25,400 unsplit), China (23,100 unsplit), and South Korea (5,400 grain splits), were partially offset by reductions for Italy (500 unsplit), Mexico (500 grain splits), and Vietnam (400 grain splits). Exports of 126,400 wet blues for 2019 were down 23% from the previous week and 25% from the prior four-week average. The primary destinations were Vietnam (33,700 unsplit and 3,500 grain splits), Italy (33,100 unsplit and 3,700 grain splits), Thailand (28,000 unsplit), and China (10,100 unsplit). Net sales of splits totaling 110,800 pounds for 2019 were reported for China (100,000 pounds) and Vietnam (10,800 pounds). Exports of 245,100 pounds were to Vietnam.
Link to Complete USDA Report: EXPORT-SALES/HIDESFAX
The International Market
Italian tanners are returning to work and there has been some inquiry for ox/heifers with small volumes being concluded at pre-holiday/unchanged levels.
The Far East remains quiet with any bids falling below the levels being submitted by European tanners. It would appear that most Far East tanners are keeping their powder dry in the hope that they will be able to purchase their requirements at face-to-face meetings at next week’s Shanghai fair.
It still looks as though the bottom of the market has been reached as there has been a sustained period of stability. The question is whether there is enough interest to move prices up? Current evidence would suggest not, leading to the expectation of a further period of unchanged prices.
Wet salted ox/heifer avg 30/32 kg @ US$28-$31 per pce C&F Asia
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