I started the week thinking this weeks writing would be about management of finishing facilities for summer heat. One item often overlooked in management for summer heat is modification of grow-finish diets to reduce the heat increment of the diet. Most often this can be done by adding higher levels of crystalline amino acids to reduce the amount of soybean meal in the diet.
However, this thought process got side tracked on Tuesday with the release of the USDA supply and demand report and a conversation I had with a local feed mill manager. The USDA report highlighted the tightening world supplies of soybeans and suggested a lower than expected carry-out at the end of the 2008-2009 market year. Soybean meal on the Board of Trade reacted by going to the highest prices since last September in trading this week.
At the same time, local basis for soybean meal suggests tight supplies. Basis for May, June and July meal prices are ranging from $7-19 over the Board of Trade price. Once you get to the September pricing when beans should become available, the basis drops back to a more historic $5-7 under the Board of Trade.
Soybean basis in the local area on Tuesday were only -$0.10 to -$0.13 while most other regional bids were $-0.20 to-$0.35/bu.
Combine the strong positive basis on soybean meal with the beginning of summer heat at our door and it appears to me that we should all be having conversations with our nutritionists to be sure we our diets formulated appropriately.