Feed Peas Show Weaker Undertone

VANCOUVER - Jul 14/06 - SNS -- Feed pea managed a mixed finish during the past week, with North American export markets showing a weaker tone, while north European markets were firmer in local currency terms and weaker in U.S. dollar terms.

Europe's internal market is partly influenced by lower than expected yields in part of the growing area because of drought conditions France. At the same time, demand for human consumption peas has been good, with France shipping food grade peas to India.

On the other hand, conditions in Spain are significantly improved over last year. Even so, buyers in Spain continue to show interest in taking product from Canada, with exporters reporting that with buyers and sellers are currently operating in a U.S. $11 per metric ton (MT) trading range.

Alaron Trading Corporation's Tim Hannagan notes some of the core fundamentals affecting some feed ingredients are friendly. The USDA lowered its ending stock forecast for corn during the past week on account of "increasing domestic feed use and exports.

"Not talked about here is the open end usage of corn for ethanol and China's exports to surrounding Asian neighbors off over 50% on the year leaving the US to fill the hole. It is a bullish supply demand report. . . The demand outlook (for Asia) remains robust and expect bullish (export sales) numbers next week as Asia plays catch up."

Hannagan said the soybean supply-demand update was more neutral. "They pegged our Sept. 1 2007 ending stocks at 560 million bushels down 95 million bushels from the June report mainly on the June acreage reduction.

"Thursday's weekly export sales report showed 316,000 MT of beans were sold last week up 41% from the week prior and 9% over our four week average.  Sounds, good, but the week prior sales were among the year's lowest.  It is neutral to friendly only due to China being in for 115,000 MT showing they maybe done buying South American crops." 

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