Feed Peas More Competitive, But No Supply

VANCOUVER - Nov 23/07 - SNS -- International feed pea markets finished the week on a more competitive pricing basis with other feed ingredients, but with limited grower support.

The change was most obvious in Europe, where grower bids in France continue to decline, allowing nominal prices in Belgium and the Netherlands to similarly drop from the highs established in October and early November.

Interest in using peas as a feed ingredient should be helped by the fact markets for major feed ingredients -- corn, wheat and soybeans -- continue to be influenced by outside commodities and crude oil markets. This reflects the diversion of part of the world's coarse grain and oilseed crops into the bio-fuel sector.

In its latest monthly commentary, the International Grains Council (IGC) said, "While global wheat and barley prices retreated further during much of November, those of maize (corn) and soybeans moved higher. . . . Futures markets remained very volatile due to the substantial scale of speculative activity at a time of continued general nervousness about the level of global grain supplies. . . .

"A recent downward adjustment in the US maize crop estimate had been widely anticipated and had little market impact but substantial weekly export sales and strength in soybeans and energy markets pushed export prices higher. In the EU, however, a substantial inward flow of third-country maize and sorghum lowered domestic feed grain prices.

"In the oilseeds sector, US soybean futures rallied to 19-year highs, the strength in crude oil and continued firm demand, especially from China, being the key factors. Canadian canola and EU rapeseed markets also rose, largely in sympathy with US soybeans. Malaysian palmoil futures set a new record, mostly mirroring gains in energy markets and US soyoil."

Prices paid by consumers are also influenced by record high ocean freight rates. This is giving sellers close to demand a distinct advantage over more distant origins. The IGC noted, "Ocean freight rates set new highs in November due to continued heavy shipping volumes, higher bunker fuel prices and a weaker dollar, but there were recent signs that demand for larger-sized vessels, especially in the Capesize sector, would be affected by an expected slowdown in China’s iron ore purchases."

Subscribers can read the full text of the article by Clicking here