Enter the price of soybean meal, the price of soybean oil, and the price of soybean into the calculator to determine the soy bean crush margin.
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Soybean Crush Margin Formula
The following equation is used to calculate the soybean Crush Margin.
CM = SM * .80 + SO * .183 - SB
- Where CM is the soybean crush margin ($/bushel)
- SO is the value of soybean oil
- SB is the value of full soybean
What is a Soybean Crush Margin?
A crush spread is a commodity trading strategy in which the trader takes a long position in soybean futures against short positions in soybean meal futures and soybean oil futures to establish a processing margin.
How to Calculate Soybean Crush Margin?
The following example outlines the steps and information needed to calculate Soybean Crush Margin.
First, determine the value of the soybean meal. In this case, the soybean meal is being traded at $50/bushel.
Next, determine the value of soybean oil. For this example problem, the soybean oil is being traded at $75/bushel.
Next, determine the value of the raw soybean. For this example, the soybean is being traded at $45/bushel.
Finally, calculate the crush margin using the formula above:
CM = SM * .80 + SO * .183 – SB
CM = 50 * .80 + 75 * .183 – 45
CM = $8.275/bushel