Feed Market Fundamentals Improve

VANCOUVER - May 12/06 - SNS -- An improved fundamental outlook for the world's feed ingredient markets for the 2006-07 season and a strong Euro helped lift international feed pea markets higher during the past week.

In its first forecast of international supply and demand conditions for the 2006-07 marketing year, the USDA predicted international coarse grain stocks will be sharply reduced as consumption moves well past production.

Global coarse grain output is forecast at 964.39 million metric tons (MT) and consumption at 1003.76 million; versus this season's 968.02 million MT harvest and consumption of 977.25 million MT. The net result is residual supplies of coarse grains will drop from an estimated 170.15 million MT at the close of the 2005-06 marketing year to 130.78 million MT a year hence.

On North American domestic markets this change is reflected in a steep drop in residual supplies of corn from 56.54 million MT this summer to a forecast 28.98 million MT next year.

Some of the decline in coarse grain output will be covered by increase production of byproducts from ethanol production in the United States and protein meal from increased oilseed crush in support of rising bio-diesel demand. However, it still suggests there is room for feed pea demand to improve as long as prices remain competitive with protein meals and other ingredients.

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