Livestock Costs & Hide Prices—Our Highlight Issue for July:

•  Livestock prices continue to march higher, recently touching the highest in recent memory.

• Nearby live cattle futures traded on the CME currently stand above 180 cents per pound, owing to persistently tighter fundamentals.

Cotton/Textiles:

• Cotton prices remain little changed in recent months, with ICE nearby futures constrained to a relatively narrow twelve-cent range since November.

• In particular, the USDA’s anticipated ending stocks of cotton for the US and world in the new marketing year rose again in July, adding to bearish sentiment.

Leather:

• In particular, the size of the domestic cattle herd continues to dwindle. At 95.9 million head, the USDA’s mid-year cattle inventory is the smallest in decades, with the numbers of cows, heifers, steers, and bulls all lower from a year ago.

•  Improving pasture conditions, relatively cheaper corn prices, and the prospect for higher fed cattle prices have fueled feeder cattle sales, in turn likely lowering the expected supply for feeder cattle available in the second half of 2023 which will likely further elevate feeder cattle prices.

Oil:

• After settling at a presumed floor this spring, oil prices have begun to creep higher, supporting our earlier outlook.

• First, Russian crude oil shipments in the four weeks to July 16th dropped to a six-month low of 3.1 million barrels per day, friendly to higher prices.

Rubber:



• Owing to looser market fundamentals, global rubber prices have sagged over the last month, supporting our earlier outlook for limited upside for price over the second half of the year.

• At 148 cents per kilogram, RSS3 nearby futures on the Singapore Exchange sank through support established over the last four months, retreating to an eight-month low.

Go deeper on all materials and inputs (<3 min read):



• Read our full July report here with charts and analysis

Key Trends:

• The value of US footwear imports retreated for the fifth straight month in May, off -30.8%, the fourth straight double-digit drop.

• Indeed, the volume of footwear imports retreated year over year for the ninth straight month in May, plunging -31.2%, also the fourth straight double-digit tumble.

• Shipments from all three largest suppliers sank at double-digit year-over-year rates for the fourth straight month, led by a -44.1% collapse from Indonesia, the second-sharpest drop in nearly twenty years.

Bottom Line:

• With demand for footwear on the defensive, we maintain our earlier view that full-year footwear imports are likely to tumble from the 2022 record.

• In fact, shipments this year are on track to rival the near-term low of 1.9 billion pairs imported in 2020 and may sink to the lowest in more than twenty years.

Go Deeper by Category: click for Total Footwear Import Data and Graphs

• Athletic Footwear: The value of US athletic footwear imports tumbled -30.7% year over year in May, the fourth straight double-digit drop, reinforcing our earlier outlook that these imports would sharply reverse direction in 2023.

• Men's Footwear: The volume and value of men's footwear imports tumbled a respective -43.6% and -37.4% year over year in May, the seventh straight double-digit decline.

• Women's Footwear: Shipments from key origins were broadly lower, sinking -27.0% year over year from China, -40.0% from Vietnam, and an eye-watering -67.6% from Cambodia.

• Children's Footwear: The volume of US children's footwear imports fell -27.9% year over year to 35.2 million pairs, the second-lowest May volume in eighteen years.

• Boots: US bootwear imports sank again in May, plunging -29.1% year over year in volume terms and -26.7% in value terms, marking the fifth straight month of double-digit drops for both.

• Leather Footwear: The value of leather footwear imports also retreated, falling -25.9% in May, the second-sharpest decline in 34 months.

• Sandal Footwear: Losses were broad-based across key suppliers. Shipments from largest-origin China fell -28.2% year over year--the seventh double-digit drop in nine months--while imports from Vietnam sank -37.8% year over year, the fourth straight double-digit drop. Shipments from Cambodia tumbled -37.7%, also the fourth straight double-digit decline.