Feed Peas Helped by Friendly USDA Reports

VANCOUVER - Jun 30/06 - SNS -- European feed pea markets are making the transition into new crop pricing, with spot markets anticipating harvest selling pressure.

Even so, markets in France were generally firmer on the week, with the average grower bid advancing from U.S. $149.80 per metric ton (MT) for farmers dressed product last week to $161.50 MT this week. New crop markets are clearly off to a good start compared to the average grower bid during the 2005-06 season of U.S. $149.11 MT.

The feed ingredient complex was helped out by Friday's USDA seeded area reports. Corn came in at 79.366 million acres, under the average trade guess of 79.75 million acres. The March seeding intention was 78.019 million acres. Last year's plantings were 81.8 million acres

Soybean seedings came in at 74.93 million acres, below the pre-report average guess by the trade of 75.16 million acres. June 1 stocks in all positions were also lower than the average trade guess of 1,016 million bushels, coming in at 990.14 million. These numbers will make markets more sensitive to near term weather events.

Analyst at the Chicago Board of Trade said if the new corn number is plugged in June's supply-demand projections, next year's "ending stocks come in at 1.315 billion bushels as compared with 2.176 billion last year.

"If yield dips 5 bushels per acre below the 149 trend line yield estimate, ending stocks dip to 954 million bushels which would be an 8.2% stocks/usage ratio, the second tightest in the past 32 years. If, however, actual yield is 5 bu/acre above the current USDA estimate, ending stocks jump to 1.677 billion bushels with a stocks/usage ratio of 14.4% which is still down from 19.7% this season. This illustrates the importance of achieving at least normal yield."

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