Please note: The nearby soybean crush margins are updated nightly for MRCI ONLINE subscribers in MRCI's Special Spread Charts (Item #28).
I purchased your Historical Soybean Report. Can the soy crush be traded as a spread If so is the pricing favorable vs. legging in each position? Can you explain the pricing I calculated buying the May crush 327.910011 53.18600001009-12.5275500010 21487? Do I then divide this by 5000 to get 4.2974 CME says the open high low were 526 544 436 respectively. Can you explain please?
"The Soybean Crush prices (BCX) are synthetically generated using Soybean, Soybean Oil and Soybean Meal futures prices; the result of the soybean crush calculation is then rounded to the nearest quarter of a cent. This is not a tradable futures contract and is being distributed for informational purposes only."
Essentially, the soybean crush is the margin of profit generated by crushing soybeans into soy products and is expressed in terms of cents/bushel. Thus, according to the quote above, a "price" of "526" actually means 52-3/4 cents/bushel.
We use the following industry standard for calculating the crush margin (11 SM + 9 BO)/10 S):
(SM*0.022 + BO*0.11) - S = Crush Margin
where SM is the price of Soymeal in US$/ton,
where BO is the price of Soyoil in cents/pound, and
where S is the price of Soybeans in US$/bushel.
Thus, Crush Margin is quoted in dollars and cents per bushel --- the value added to a bushel of soybeans by crushing into its products.
With the 2/13 closes of SK at $12.60/bushel, SMK at $333.30/ton, and BOK at 53.42 cents/pound, the May crush margin may be calculated as follows:
Crush margin = (333.30 * 0.22 + 53.42 * .11) - 12.60
= ($7.3326/bu + $5.8762/bu) - $12.60/bu
= $13.2088/bu - $12.60/bu
= $0.6088/bu
Remember that commercials trade the crush with 11 contracts of SM and 9 of BO against 10 of S. However, it can also be traded with one of each.
