European Feed Peas Ease

VANCOUVER - Jul 4/08 - SNS -- European feed pea markets continued to ease during the past week, with dealer markets in Belgium and the Netherlands losing value even as food pea exports supported field pea bids to growers in France.

French exporters are covering early season sales to the Indian subcontinent and other destinations, with overall buying interest helped by an expansion in the number of countries imposing export trade bans on their local traders, including the resale trade.

Looking at major feed ingredient markets, Alaron Trading Corporation's Tim Hannagan said, "Demand for corn world wide remains at record levels on the world's expansion of ethanol and Asia feed lot expansion demanding more corn but it is clear recent record high prices have ethanol plants here trimming production and our recent cattle on feed and hog reports showing reductions in animal numbers to be fattened on corn.

"It is a sign of price rationing but a mild one. We can cut usage in all areas (in the United States) but unless we cut exports the world will take what corn we do not use for ourselves; as there is no sign of price rationing their needs. With the acreage report out of the way until the August update, it is all about weather and its impact on the crop's condition. Traders now will say we are more concerned about weather's impact on what has been planted versus what was not planted.

"With the current planted (corn) acres estimate of 87.3 million acres and our current yield estimates, both surely to change. A 3 to 4 bushel per acre drop in yield would cut our ending stocks from 1.4 billion bushels this year to near zero next year, unless the price moves high enough to discourage usage. This will be the biggest year for weather's impact on production not just because demand is outstripping production -- but we have gone from 100 million dollar trading funds to 100 billion dollar trading funds. All price moves become exaggerated."

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