EU Feed Peas Easier, Food Firmer

VANCOUVER - Jun 27/08 - SNS -- European feed pea markets were easier on the week in anticipation of new crop deliveries from growers, but grower bids for food grade peas were export were stronger, diverting grower attention away from feed to food.

Grower bid levels in France were strong at Rouen, but weaker in areas accumulating peas for sale to regional feed markets. By contrast, grower bids in the United Kingdom remain uniformly strong, reflecting the expectation growers will use feed as a residual outlet for the worst qualities of pulses harvested..

Looking at major feed ingredient markets, Alaron Trading Corporation's Tim Hannagan said there is a growling sense high prices for corn and similar products are starting to ration demand for wheat remains until new crop.

"To some extent rationing has begun with last week's cattle on feed report showing that less cattle on feed being fattened on corn. The larger effect on demand numbers come as flooding in the Midwest has corn's main shipping channel to ports -- 'The Mississippi' -- closed to barge movement for week number two. No grain at the gulf ports mean no shipping.

"It could get worse near term with this week's torrential Midwest rains. WXRISK.COM is now looking into next week with a chance for further significant rains July 3rd, 4th, and 5th, across the Midwest."

Hannagan said Monday's USDA seeded area estimates are an important milestone in the development in new crop market values. "This report is usually the final planting report of the year and accurate to a foot of planted acreage, but record spring rains causing flooding and re-planting questions leaves this report to give us only an idea where we are at on planting -- with another report by the government to come late July or early August.

"Here is how the 20 major brokerage firm's estimates read: The average guess for corn acres was 85.321 million acres seeded versus the March 31st report of 86.014 and last year of 93.6 million. The average guess is only slightly bullish unless the yield estimate is lowered again. The range of estimates are from as high as 87.34 million acres to as low as 79.6.

"Regardless of Monday's numbers we have 90% of the growing season ahead with potentially the worst of our weather and biggest moves to come or maybe the best of weather. Monday's number will tell me just how much importance to put on each weather update, as to its effect on yields and production."

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