World Feed Pea Market Easier

VANCOUVER - Feb 27/09 - SNS -- European feed pea markets maintained their easier tone through the past week, with a sharp decline in grower bids in France contributing to weakness in reseller markets in Holland and Belgium.

The softer tone in France is largely attributable to an absence of competition for available supplies of peas from food pea exporters. This has forced users to think in terms of the competitive relationship between peas and corn, wheat, protein meal, and other ingredients. That has not been helpful.

Alaron Trading Corporation's Tim Hannagan notes markets were probably not helped by weekly export trade data from the United States. Corn sales eased during the past week.

"We had five consecutive weeks of 1 million metric tons (MT) or more sold so it is not unreasonable to have a slow week and it does not suggest a turn in demand. Traders will watch next week's number to see that this week was an aberration," Hannagan stressed.

"Demand overall into year's end will firm on many fronts beginning with the President Obama ethanol increase, an expansion of U.S. feed lot numbers after a 8 month liquidation but now seeing feeders take advantage of corn under $4. and foreign feed lot numbers expanding. This week was just as we called for -- and that being a month end short covering week as the short in the market had the profits and used all breaks to buy them back.

"March enters with a different mind set. Weather in South American and its effect on their grains is no longer the market's primary pricing force as crops planted late are at the end of key yield development time. The grains will pay more attention to the Dow, the dollar index and crude oil.

"Crude will be the primary outside market for grains attention. I am not an energy analyst but crude likes to rally from March through July the high driving and demand time, so this helps ethanol and that supports corn usage.

"Next we have they March 11th USDA crop report. A strong February export pace and South American weather issues to catch up on will have traders fearing the report will increase exports and lower ending stocks. Then we have the March 31st planting intension report. At the USDA Ag forum Thursday the government left acres to be planted this spring unchanged from last year but traders will expect the March 31st report from farm surveys to show less acres to be planted this April and May."