Easier Tone in European Feed Peas

VANCOUVER - May 9/08 - SNS -- European fed pea markets finished the week on a generally easier tone as markets continue the transition into new crop, while North American markets continue to supported by ongoing exports of food quality peas.

Looking at major feed ingredient markets, Alaron Trading Corporation's Tim Hannagan noted, "Friday's monthly USDA crop report put ending stocks for the beginning of our 2008 marketing year for corn: September 1st, at 1.383 billion bushels, and our September 1st, 2009 ending stocks at 763 million bushels about in line with pre-report trade guesses.

"Now, this is dangerously low 2009 ending stocks will occur only if we have a perfect growing season; these are hard to come by as it is always too hot here or too dry there. Any problem with weather from June 1st through July, our key growing period that reduces yields and price rationing will occur. Twelve dollar corn or higher could occur if weather turns foul as a price to discourage over consumption will be necessary and we all saw that happened to wheat when price rationing entered."

Hannagan noted the report pegged soybean ending stocks at "145 million bushels down 15 million bushels; from last month and pegged our 2009 ending stocks at 185 million bushels only 40 million bushels more than this. The report essentially said that even though we will plant 11 million acres more this year, demand and usage will chew up all but 40 million bushels of its yield, leaving stocks this year and next, dangerously low.

"Beans like corn, are one dry stretch this summer from talk of running out of beans next year. A drier than normal western beans belt along could lose 185 million acres. So, weather will be critical from June 15th to August 20th, the key growing period. The long term will play out as weather dictates. Near term we will trade current weather updates."

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