Continued Strength in EU Feed Peas

VANCOUVER - May 30/09 - SNS -- International feed pea markets continued to firm during the week, finding support in rising international feed ingredient values and a weak U.S. dollar.

Once again during the week, there was a significant improvement in U.S. dollar equivalent values for feed pea grown in France and the United Kingdom; as well as on reseller markets in Belgium and Holland. There were also reports of limited buying of third country feed peas by buyers in Spain.

Alaron Trading Corporation's Tim Hannagan expressed some concern about the latest export sales data from the United States, saying that sales need to be in the million ton range to be bullish, instead of the 756,000 metric tons (MT) reported for corn on Friday.

"The numbers are neutral. You can not view it as negative as Asian customers who account for 70% of our exportable grain business year remain active. However, it is not bullish as we need over 1 million MT weekly for a bullish mind set and a minimum of 850,000 MT To be friendly.

"I could have saved time by saying just ignore it but we need to keep our knowledge of range importance and understanding that each week varies on reasons. Sometimes it is a holiday week such as this week with one less export day. We saw a step back by importers on the Swine Flu scare one week and now we hit new price highs on the year and some importers took a break.

"Overall corn demand is good. We look for ethanol issues to continue to evolve in a bullish way and feed lot demand to continue to show expansion from last year's late collapse. As an example, the feed numbers for May 1st Cattle Report were down 3% from a year ago, numbers of cattle placed on feed lots to be fattened on corn and soy meal for later slaughter was up 4%. We have seen placements gaining since February," Hannagan said.

"What about next week? Everyone is talking about how over due we are for a bigger correction in the grains but at the same time no one will want to be short and surely want to be long ahead of the USDA Monthly Crop Report on June 10th as all will expect another drop in our ending stocks numbers due to better than expected demand and usage. Any correction of any size would have to be before next Wednesday as late next week all trading will be in favor of a bullish crop report.

"Odds are the bigger correction should hold off until after June 10th report. Reason being the crops will be planted with talk of moisture helping early emergence and the next big report is June 30th the planted acres report and traders will not be thinking all bullish but many bearish."

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