European Feed Peas Decline

VANCOUVER - Oct 3/08 - SNS -- Crashing field crop futures markets and a significant rise in the value of the U.S. dollar drove feed pea markets down on the week in Europe.

Discussing the underlying economic situation, Alaron Trading Corporation's Tim Hannagan said passage of a $700 billion bailout package by the U.S. Congress and Senate will allow agricultural markets to get back to worrying more about the fundamentals of supply and demand than the financial crisis.

"The last several weeks have been index funds selling their long positions as the platform their trading on which is our economy and exchanges are in trouble. We have a rally coming from this break but from what level is still uncertain until this economic concern stabilizes.

"Next Friday is our USDA monthly crop report. Private forecasters are coming out now with one looking for a 48 million bushel drop from the September report of the USDA and 133 m.b. drop from their own. A poll off the 20 major brokerage houses will happen Monday and their average guess will be posted Tuesday to get an idea of what the trade expects.

"Here is some thoughts: Since the Monday crop condition reports for the month of September added up to only a 1% decline in the good to excellent condition. We have to think the USDA will leave production and yields unchanged and do to the quarterly stocks report showing an increase in stocks on hand as of September 1. We have to assume they would add that to corn's ending stocks increasing them slightly. That is what the government's own monthly numbers expect to see."

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