Mixed Week For Feed Peas

VANCOUVER - Feb 9/08 - SNS -- Parity prices on European feed pea markets softened during the past week against a weakening Euro and quiet export demand, while grower level prices in France and the United Kingdom were little changed to firmer on the week.

There is a strong relationship between export demand from France and bid levels in the port city of Rouen and average prices being paid to growers. Interestingly, most of those exports are reported as feed peas, though the destinations are considered food pea destinations.

North American feed pea markets remain quiet. Some quality tolerances on export food grade peas are relaxing as stocks tighten, limiting the percentages of natural splits and bleached peas which might otherwise be available to domestic feed users.

While export oriented buyers are maintaining low bids for feed peas, local mixers are paying more because of increased difficultly sourcing product. Local feed buyers in Saskatchewan were reported paying up to CDN $5.75 per bushel or $211.27 per metric ton (MT), versus $4.50 per bushel or $165.34 MT from domestic resellers and export oriented buyers.

Alaron Trading Corporation's Tim Hannagan notes that markets for energy crops such as corn continue to be demand driven. "As I have been saying since last fall, I look for demand or exports in 2008 to far exceed 2007 as China keeps more corn home to address dire domestic needs for expanding feedlot populations and bio-fuel production leaving the U.S. to supply their surrounding Asian neighbors with their needs.

"Corn remains bullish long term into our fall harvest with possibly our sharpest grains as harvest begins in September and ethanol plants and feeders grab their share of cash inventory. Near term, corn will be the caboose of this train, following behind the acreage buying lead of beans and spring wheat futures," Hannagan said.

"China continues to buy U.S. beans and South American beans, while posting no cancellations of previous U.S. purchases. This is important as this time of year usually sees them switching previous U.S. purchases to Brazil for better value but their needs are too great. They need the beans to crush for the meal on expanding hog and chicken populations and the oil for cooking."

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