Feed Pea Future Uncertain

VANCOUVER - Feb 16/07 - SNS -- International feed pea markets ended the week little changed in local European markets, though rising in U.S. currency terms.

North American markets, by contrast ended the week on a slightly firmer note, helped by continued strength in corn and soybean meal markets. Meal continued its recent upward spike and all current and 2007 crop delivery contracts for corn finished the week well over U.S. $4 per bushel, generating anxiety about field pea area prospects for 2007.

There is a general perception in North America that peas will be able to withstand the public relations onslaught by $4 corn, $8 canola, and $2.50 oats. But, to the extent growers in Manitoba offer guidance to the sensibilities across western Canada, North Dakota and Montana -- peas could be in more trouble than the industry thinks.

Field pea growers are extremely optimistic about prices prospects for human consumption and feed peas for the remainder of the current marketing year and they may be signalling a need to see similarly exciting values for 2007 crop markets to take a chance on peas -- as opposed to locking in strong returns for other crops.

The USDA's March 30 seeding intentions estimates could be a critical moment in the evolution of new crop markets. Traders are bracing for an unprecedented 10 million acre corn crop in the U.S. and just 6.6 million acres of soybeans. If such numbers are contained in the seeding intentions forecasts, market reaction could be strong unless they are convinced that much corn can be absorbed; while oilseed markets could end being mortified by such a production outlook.

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