Birdseeds Mixed on Weak Grains

VANCOUVER - Oct 1/10 - SNS -- Birdseed ingredient markets posted a mixed finish on the week on account of significant weakness in major grain and oilseeds on account of excellent harvest progress.

Markets were not helped by confusing stocks in all positions numbers for corn, which implied the USDA found corn from last year's harvest. Rather, some market participants argue, it may be unusually early harvest activity in the U.S. south.

Tim Hannagan of the PFGBEST Research Team explains, "Last year was one of the coldest and wettest grain seasons in history. It was so wet during the planting season there was fear corn and beans acres would go unplanted. At harvest time it was so wet and cold fear was we would never get the crops harvested. The quarterly report and monthly reports looked as if we had no grain as it was still in the fields. The harvest was the latest on record.

"This year is the opposite. We were generally dry and hot. We had a record early planting pace and harvest got underway earlier than ever. The trade believes that the USDA is including early harvested corn from the southern Delta into its quarterly inventory. When normally they wouldn't. The reality here is if added to this report. It's not added to the next. It's not discovered corn, but reshuffled inventory.

"Nothing is changed as we head into the weekend, expected fast harvest pace and generally lower yield talks with a firmer tone to pricing ahead of the crop report next Friday. Corn looks to be the leader as just about everyone agrees the report will lower yield and production as well as next year's ending stocks. Beans find strength from talk of frost this weekend across the upper Midwest, Northern Illinois, Indiana and the Western grain belt and talk of drought in South America.

"The question is can we make new highs on the year for corn and beans or are the highs in. Because of the prices were at , we can't expect new highs ahead of the report. It will take report day to be bullish enough to break this past week's contract high prices. But expect prices higher prior the report's release. This next report is corn and beans last chance to make another new growing season high on prices as in October we will harvest the higher-yielding corn and beans in the upper Midwest and Western grain belt, setting up a more bearish psychology ahead of the November crop report."