Series 3: 3.4.2.1. Soybean Crush Spread

Taken from our Series 3

3.4.2.1. Soybean Crush Spread

The soybean crush spread is a common processing spread. The name derives from the practice of crushing soybeans to extract the oil and manufacture the meal. The soybean crush spread is a synthetic futures contract consisting of three legs. A buyer of a soybean crush spread will be long 10 soybean futures contracts, short 11 soybean meal contracts, and short 9 soybean oil contracts. This soybean crush synthetic futures contract is offered on CME and has a contract size of 50,000 bushels.

A crush may take other shapes as well, by acquiring each of i

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