Firmer Tone in European Feed Peas

VANCOUVER - Jun 20/08 - SNS -- European feed pea markets were mostly firmer on the week, with markets starting to complete the transition into a new crop merchandising mode.

Grower bid levels in France were generally stronger on the week, with all bids reflecting new crop pricing. Interestingly, most port buyers were withdrawn, with the result growers saw bids in only a limited number of interior destinations. Grower bids in the United Kingdom were firmer on the week; while dealer markets in the Netherlands were softer and Belgium firmer.

Looking at major feed ingredient markets, Alaron Trading Corporation's Tim Hannagan notes they remain locked in a weather market, with worries about how much corn be planted this spring in the United States pushing futures markets for that energy ingredient to record levels "leaving importers sitting on their hands and river transportation problems not allowing grain to move to ports.

"Last Friday on my weekly report I said look out for profit taking this week as the following week of June 22nd to June 27th is the last chance to get positioned long ahead of the potentially very bullish June 30th planted acreage report. Funds will not be selling but buying. . . . For next week, we should have positive expectations on reports.

"Monday's crop condition report should reflect more deterioration due to flooding and private crop forecasters should supply a fair share of bullish planted acreage estimates ahead of the big June 30th report. Therefore, unless something enters the market that is not there, now we should close higher on the week.

"Now that the worst of the spring planting rains are behind us- we need to address the various weather psychology that lies out there. With a generally drier 10 to 15 day outlook many believe this is bearish for corn and beans as it allows flooded lands to dry out and improve emergence. Makes sense but let us also consider this: large index trading funds have received weather data from their services projecting a warmer and drier than normal July through August in either the western grain belt and or entire Midwest. The current talk of drier conditions ahead may have traders thinking, here we go, from too wet to too dry. Time will tell, whether the worst or the best of our growing season weather is to occur."

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