CBOT contracts on 100 short tons of soybean meal, the protein feed that is the larger share of the crushing margin by value.
Meal is quoted in dollars per short ton, and one contract of 100 tons at $320 is $32,000. It is the feed input for poultry, hogs and cattle, so its demand follows livestock margins rather than human food consumption.
Because 100 tons corresponds to about 4,545 bushels of soybeans crushed, the standard crush-spread ratio uses 11 meal and 9 oil against 10 bean contracts to balance the physical conversion.
Example: meal at $320 a ton. One bushel of beans yields about 44 pounds of meal, so 320 / 2,000 x 44 = $7.04 of meal value per bushel — two-thirds of the total product value against beans at $10.50.
Original diagrams for the ideas on this page. Illustrative, not real market data.
The bid-ask spread. Buy orders sit below, sell orders above, and the gap between the best bid (50.01) and best ask (50.04) is the spread you pay to cross. Bar length shows the size resting at each price.
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