European Feed Peas Weaken

VANCOUVER - May 30/08 - SNS -- European feed pea markets continued to ease during the past week as the region makes the adjustment from current to a new crop footing and the availability of freshly harvested product from France and central Europe.

This was reflected in solid declines in grower bids in France and a moderate easing in field bean and field pea bids in the United Kingdom. Inter-dealer markets in Belgium and the Netherlands were also easier in local currency terms.

Looking at major feed ingredient markets, Alaron Trading Corporation's Tim Hannagan notes markets remain strongly influenced by energy markets because of the volume of grains and oilseeds being diverted to manufacture ethanol and bio-diesel.

"(In Friday's report) I said get ready for that big $4.00 plus drop in crude oil, pulling grains down with December corn futures finding support at 6.00. I said this could occur before month end and to buy the support break. Thursday’s low was 5.99 with a mid-session high today of 6.18.

"Always remember that when index funds are fat with profits they always take profits. Most funds have a clause in the contract that states a bonus can be paid to the fund manager on profits taken before the month ends. They never leave that money on the table. When crude began to collapse Thursday, corn, beans and wheat followed.

"Like corn, I too cautioned you on my last two reports to get ready for a sharp month end crude oil drop pulling November soybeans down to the 13.00 to 13.25 area and to be ready to buy. . . . Wet western grain belt state weather currently and next week looks to slow bean planting. The majority of our bean acre increase this year is in the western belt."

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