Feed Peas Hold Value

VANCOUVER - Oct 13/06 - SNS -- International feed pea markets finished weekly trading firm in sympathy with other base agricultural commodity markets and strength in human consumption markets for field peas.

Markets were helped by generally positive tone to soybean, corn and wheat markets where traders see the crops needing to battle each other to retain the interest of growers next spring. While futures markets are frequently described as overbought, there is a growing sense things are not finished.

Alaron Trading Corp.'s Tim Hannagan notes that the USDA is now forecasting the fifth lowest corn ending stock in the United States in 31 years at 996 million bushels, down 224 million from the September report.

"Not to mention world ending stocks put at a record low 89.5 million MT. It makes corn under valued even at these prices. Corn has two missions into early spring. One, to find a price high enough to ration the crop or to discourage over usage so we do not run out. Two, to stay high enough to encourage farmers to plant at least 3 million more acres come spring."

The situation is exacerbated by the disastrous drought in Australia, which is destroying that country's crops. Traders now believe the wheat harvest will not exceed 8 million metric tons (MT) and they say temperatures that are double normal in some areas are blasting the yield potential out of pulses.

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