Crush Spread
The price difference between soybeans and their processed products (soybean meal and oil), representing the processing margin for soy crushers.
Formula
Crush Spread = (Meal Value + Oil Value) − Soybean Cost (per bushel equivalent)
The crush spread measures the profitability of crushing soybeans into soybean meal (used in animal feed) and soybean oil (used in food and biofuels). One bushel of soybeans (~60 lbs) yields approximately 44 lbs of meal and 11 lbs of oil (the rest is hull and moisture).
Soy processors (crushers) hedge their margin by buying soybean futures and simultaneously selling meal and oil futures. Traders use the spread to express views on crush economics — tight meal supply, biofuel demand, and seasonal crush capacity utilization.
The crush spread is quoted as the value of the products minus the cost of the beans; positive spread means crushing is profitable.
Example
Soybeans: $11.80/bu. Soybean meal: $350/short ton. Soybean oil: $0.52/lb. A 60-lb bushel yields ~44 lb meal and ~11 lb oil. Meal value = (44 ÷ 2000) × $350 = $7.70; oil value = 11 × $0.52 = $5.72; total product value = $13.42/bu. Crush margin = $13.42 − $11.80 = $1.62/bu — positive, so crushing is profitable and processors run hard.
Related Terms
Agricultural Commodities
Farm-produced goods traded on futures exchanges — grains (corn, wheat, soybeans), oilseeds, and livestock — with prices driven by weather and seasonal crop cycles.
BeginnerCrack Spread
The price difference between crude oil and refined petroleum products (gasoline, diesel), representing the refining margin.
AdvancedSeasonality
Recurring, calendar-driven price patterns in commodities caused by predictable cycles in supply (harvest) and demand (weather-driven consumption).
IntermediateSpread Trade (Commodities)
A trade that goes long one commodity contract and short a related one — exploiting price relationships between grades, delivery months, or related products.
IntermediateWASDE Report
The USDA's monthly supply-demand report for major US and world crops and livestock — the single biggest scheduled catalyst for grain and oilseed futures.
Intermediate