Feed Peas Finish Easier

VANCOUVER - Sep 15/06 - SNS -- European feed pea markets ended the week on an easier note, with prices in all major reporting markets falling below week early levels.

Markets have a better idea of what they will be dealing with on a supply basis in the coming year, which always takes the sting out of speculative wonderment in front of the fact.

They were also affected by general weakness in international feed ingredients markets, with last Tuesday's USDA crop production and supply-demand updates deemed bearish for both corn and soybeans and generating a strongly bearish reaction in wheat.

In the case of corn, the December futures got within two cents of contract lows after the USDA reports were released. With coming reports expected to increase the supply stakes for 2006-07, some market analysts are looking for December corn to break down to between $2.20 and $2.27 per bushel.

Soybeans were pushed to contract lows during the week, before profit taking stemmed the tide. The markets oversold condition and fears of a frost in the United States early in the coming week contributed to the buying which helped the market lift off its lows.

Feed pea markets cannot avoid these fundamental factors even if the human consumption part of the market is advancing. The good news is stronger values and demand for food peas gives growers with good quality product some options.

There is some talk of the spread between feed and food peas widening. However, that is not yet the case. A normal spread is around CDN $75 cents per bushel or $27.55 MT, which is roughly where markets currently stand. The most significant exceptions were during 2001-03 and 2002-03 when it stood at CDN $1.72 and $1.76 per bushel or $63.20 and $64.67 MT respectively.

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