More Weakness in Feed Peas

VANCOUVER - Oct 17/08 - SNS -- European feed pea markets led markets for the commodity lower on the week, with harvest selling presurte now evident in the United Kingdom as well as other origins on the continent.

North America's internal markets was little changed, with growers still able to obtain better prices from food consumption markets when they try to sell product.

Looking at the situation for major grains and oilseeds, Alaron Trading Corporation's Tim Hannagan says hedge funds are continuing to liuquidate their large positions in corn, soybeans and wheat, contributing to the weaker undertone in fiutuires markets. However, this appears to be attracting end users in the United States, with buying on cash markets advanacing at a good pace.

"Farmers continue to harvest beans first and let corn sit in the field to dry. Beans for cash now always means farmers intend to store corn on the farm for hopefully better prices next year. . . . Clearly as prices have declined demand has risen.

"We would be selling the grain either way as harvest attracts users such as feeders and food processors but the value has many wanting to load up. Nothing was different this than the three prior weeks.

"Large index funds continued to liquidate their large long positions in corn, beans and what as they cut risk exposure due to the still deflating economic conditions and unstable trading exchange platforms. This will continue until the stock economy stops going down. It is that simple. Once funds find a comfort zone of positions, they will slowly come back but largely in the back months from March through December 09 corn and March to November beans.

"When we come in Monday, we look to outside markets for grain direction in this order of importance. Crude oil, stock indexes, and the dollar index. If crude and stocks are selling off and a higher dollar index we will sell the grains. The reverse, we buy."

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