Recessionary Pressures Pound Feed Peas

VANCOUVER - Dec 6/08 - SNS -- General weakness in agricultural commodity markets at week's end took its toll on feed pea markets, with European field pea markets finishing the week posting significant price declines.

Values were off sharply at the grower level in France and the United Kingdom, while export trading levels for peas from the Ukraine collapsed as short term market needs fell far short of offers from growers and processors.

Looking at major feed ingredient markets Alaron Trading Corporation's Tim Hannagan said, "Lower crude oil prices and a continued decline in stock indexes had large index funds continue to liquidate their net long positions in 12 ag markets. Eight weeks ago they held 305,000 long corn positions and entering this week 231,000.

"With corn and bean harvest complete, and the grain locked up in storage for higher prices in 2009 -- there is little fundamental news of their own to trade off of until fund liquidation is over. I still believe crude oil is the key that once it bottoms, so will the grains. I targeted $35 per barrel as a low and we are currently $41. Some think $25.00 will be seen. Regardless, we await a low for confirmation."