What happened this week: The week was a bi of a reflection of the previous one. Generally remains activity to be on seasonal lower levels and since buyers are generally in a bearish mood enthusiasm is pretty much subdued. To buy hides in volume. However, having said this we cant remember for a long time, when market opinions have been so different in our are. While some are convinced, that the bearish tone is going to continue for still some time until we are going to reach a final market settlement, there is a surprising number of our colleagues are of the opinion, that the market is now going to hold and not to correct any further. Well, we think first of all it has to be discussed what correction one is talking about. The only real market reaction we have seen is on the heavier and higher quality end. All other grades have just been fluctuating around the levels seen already for a few months. Being positive or not about the market, but one cant deny the fact, that all over Europe the market pressure is incrementally rising and European origins which are mainly depending on the Italian market are facing weekly rising pressure to move adequate volumes no matter the price. This is starting to build accumulation of hides

and this probably for the first time in the last cycle. In the medium and lighter weights the situation might still be yet of little influence, but in heavy hides the  problem  mounts much quicker. Looking at this scenario and checking the calendar it is quite difficult to share too much market optimism. As far as the domestic situation is concerned fierce competition at the abattoirs and stocks in heavy material may lead to the hope for steady selling prices across the board, but extra heavy hides which are predominantly focussed on the European industry do still not seem to find enough demand to be absorbed in the quantity the are slaughtered. May be, that we are too pessimistic, but it is difficult to find reasons to change the opinion. The rest of the market remains in normal conditions. Interest and bids in particular from Asia dry never up completely and also this week there was enough demand for dairy cows to choose from. Although tanners are bidding aggressively at the end prices remain on the same level and move by 50 cents or so. Surprisingly also some interest and sales for ox/heifers were generate, but only with non-regular clients and so the is the value for the market

analysis at least questionable. The interest for standard dairy steers from Asia is far less then anytime before in 2007. The reason is the remaining uncertainty about the progress of the US steer market where most Asian tanners want or fear a further decline in prices. As we all know are Asian tanners only good buyers in a rising market. The modestly firmer USD was giving again a helping hand towards the decline in price revenues and the end result of the market also this weeks remains for us: Problem on extra heavies not yet solved, while standard grades are defending stubbornly against a weaker trend. The kill: Normalizing a bit considering, that we have full weeks now. In the catholic parts we still have one holiday to pass and then full slaughter weeks will return. Presently we see many more males in the slaughter mix which is helping to defend against the usual supply bottlenecks of fresh material at this time of the year.  What do we expect: There is still little reason why we should see a major change in the price structure. Neither buyers nor sellers are willing  to move either way and so remain levels fixed without a real justification of trading volumes. Extra heavies do still not look good and should further adjust.