Peas Little Changed in Light Trade

VANCOUVER - Jul 3/09 - SNS -- European feed pea markets are starting the transition from current to a new crop basis, helped along by an increase in the quantity of feed peas being offered by exporters in the Ukraine and other shippers in the Black Sea region.

The first new crop, open market bids were also noted during the week in the United Kingdom, with growers looking at steep discounts to spot.

Alaron Trading Corporation's Tim Hannagan notes feed ingredient markets have undergone significant psychological shifts in the mindset of traders this year and it has now shifted entirely into "weather market" style trading.

"Ninety percent of the grain market pricing through September first is weather and its impact and no planted and growing crop. Ten percent of the daily pricing is demand and the daily price swings in the Dollar Index, crude oil and stock indices.

"History has taught us that July and August brings generally warm weather and timely rain beneficial to crop development. We have not had a real drought since 1988. However, it is a big growing area in this country and there are always a few weather scares as it is too hot here and not enough rain there.

"The last two years saw ideal July-August weather. The only difference is that we have a Heat Dome area in the Southwest that moved into the Midwest last week the end of June but moved back out west leaving this week cool. There is going to be weather gurus that will call for this Heat Dome to reradiate back into the Midwest from time to time.

"Currently WXRISK.COM the weather site sees some Western Grain Belt and Southern Delta rain this weekend and some better Midwest coverage possibly next Tuesday and Wednesday before late week sees the Heat Dome move in but for only three or four days. If we come in Monday and the rains expected are drying up and there is a call for the Heat Dome to move in and stay a week or longer the market will rally beans to new contract highs as we are not far off them and December corn to fill the chart gap to 3.95. Timely rains and coverage corn could push to 3.35 basis December Futures and November beans back to 9.43.

"Weather rallies and breaks are big and quick and almost always start on Monday's as traders return from a weekend and look at the 6 to 10 and 11 to 15 day forecast projections. So change your mindset on trading psychology for the next eight weeks to a weather mindset."

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