The International Market

China

Not much happened this week in the China hide market, but it is indeed getting a slightly more active because some tanners decided to build up a modicum of new hide inventory before January 1. However, the price idea from many tanners remains no better than previous business on packer steer hides and a lower price (again) on cows hides.

American steer hides price remains steady although there is not much follow-up business concluded for now after a few major tanners booked a decent volume of steer hides in July and August. This was primarily because these tanners are not feeling comfortable enough to keep buying hides while the leather market is not really getting much better. In addition, American major packers raised the steer hides price a few times and they tried again after the Shanghai Leather fair but even their “old friend buyers” have started to refuse to pay more since then.

The American cow-type hide market is totally another story as some major American sellers had to lower the price to a new low level after the fair in order to get rid of many dozens of containers of these hides (some of the lowest-quality cows hides). The price was already below US$8 per hide C&F after the fair.

Only those tanners who focus on high-end leather still enjoy decent leather business these days, but they usually only buy premium-quality hides in the world such as some of American steer hides, some of the Chinese local hides and European hides. That high-end leather market is a quite small though, which means only several tanners are making a good living.

Most Chinese tanners are still having a hard time keeping the tanneries running everyday simply because there are not many new orders from the leather market. Correspondingly, people are not feeling positive about the future market over the course of the remaining year. The same thing was reported again and again after the Shanghai fair: hide prices are not the problem, it is the serious reduction of leather orders—a fatal problem to many people in this business.

Cattle on Feed

United States Cattle on Feed Down 1%

Cattle and calves on feed for the slaughter market in the United States for feedlots with capacity of 1,000 or more head totaled 11.0 million head on September 1, 2019. The inventory was 1% below September 1, 2018.

Placements in feedlots during August totaled 1.88 million head, 9% below 2018. Net placements were 1.82 million head. During August, placements of cattle and calves weighing less than 600 pounds were 385,000 head, 600-699 pounds were 300,000 head, 700-799 pounds were 424,000 head, 800-899 pounds were 440,000 head, 900-999 pounds were 230,000 head, and 1,000 pounds and greater were 105,000 head.

Marketings of fed cattle during August totaled 1.95 million head, 2% below 2018.

Other disappearance totaled 61,000 head during August, 11% above 2018.

Market Activity & Analysis

US hide suppliers faced a little more headwind from buyers with initial bids down a dollar or two from prior trading levels. Many were countered and most of the business settled close to last week’s levels. Some major packer reports include HNS from $39 to $39.50, BBS from $35 to $36, HTS at $26, BS at $24 and CBS from $22 to $23 FOB plant.

Week-Ending Slaughter

The week’s estimated cattle slaughter was 658,000. The previous week’s kill was 629,000 and the corresponding week last year it was 653,472. Year-to-date slaughter at 23.911 is up 1.1% from 2018.

Today’s Market

The week ended on a quiet note with a couple steer sales quoted at prices within the past week’s trading ranges.