Feed Peas Enter Holiday Mode

VANCOUVER - Dec 19/08 - SNS -- Feed pea markets ended the week on a quiet note, with domestic and export users reporting limited trading interest. This reflects the fact markets are entering the Christmas and New Years holiday period along with uncertainty about whether major feed ingredient markets have finally established their season lows.

Alaron Trading Corporation's Tim Hannagan said markets for major feed ingredients remain hopeful season lows have finally been established for corn as this will help bring end users back into markets.

"(During the week) we had a sharp rally and key customers got aggressive possibly signaling they believe lows are in and the previous hand to mouth as needed buying is over. Not a bad week for corn, posting new monthly highs at 4.02 basis March futures before profit taking. Corn is struggling a little.

"Strength is coming from a sharp drop in the dollar against other currencies making it a favorable exchange rate for buying U.S. commodities. Most important is the dollar's drop against the yen. Seventy percent of our exportable feed grains go to Asian markets. So this has the trade looking for a pick up in demand.

"The negative influence is the continuing decline in crude oil and its psychological effect on ethanol from corn. This helped cap the highs helping pull corn down Friday. It is all charts and the direction of the dollar index and crude oil come next week."