European Feed Peas Weaken

VANCOUVER - Nov 16/07 - SNS -- European feed pea markets ended the week on a softer note, with prices declining in the Continent, while remaining unchanged in the United Kingdom in local currency terms but falling in U.S. dollar terms, where available supplies lag behind demand.

Underlying feed ingredient markets were mixed on the week. Soybean meal, which competes with peas on a protein basis, advanced; while corn, which competes with peas on an energy basis, declined.

Alaron Trading Corp.'s Tim Hannagan said demand is a key factor in corn markets at the moment, as the harvest is essentially complete in the United States and the USDA will not update production estimates until its final crop report in January. "Leaving supply side fundamentals a side note.

"With no new highs in crude oil to drive corn based ethanol and no new highs in gold or silver; a new low in the dollar index all kept corn strength on the side lines. With the large index funds heavily long crude, metals and corn it is easy to understand why I keep telling you to use those outside markets as the lead to corn's daily price direction.

"With potentially a late November and or early December sell off in crude and metals pulling corn down with it as large index funds balance year end positions. Look for those year end bonuses on profits taken. It is a theory to keep in the back of our heads but stay focused on crude, dollar index and metals first everyday and in that order of importance.

"Next week sees an early closing of grains Wednesday of 12:00 Central or one hour 15 minutes early. Closed Thursday for Thanksgiving Holiday, then another 12:00 closing Friday. Historically, grain trading would wind down on holiday week as the old agricultural trading fund managers headed for warm weather. The large index funds, money outside the country see the holiday shortened week as a reason to accelerate their trading possibly. This making next week one of our most volatile.

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