CBOT contracts on 60,000 pounds of crude soybean oil, quoted in cents per pound, increasingly driven by renewable diesel policy rather than food demand.
Soybean oil was for decades a food ingredient whose price followed palm and canola oil. Biofuel mandates changed that: renewable diesel plants now compete with food processors for the same feedstock, which has tied bean oil to heating-oil and to policy announcements about blending credits.
A contract is 60,000 pounds, so each cent per pound is $600. That makes bean oil the most tick-sensitive leg of the crush.
Example: oil at 45 cents is $27,000 per contract. A one-cent move is $600. Per bushel of beans, 11 pounds of oil at 45 cents is $4.95, which with $7.04 of meal gives $11.99 of products against $10.50 of beans — a $1.49 crush-spread.
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.
Educational only, not advice. Spotted an error? Post in Site Feedback.