Meal value per bushel:
Oil value per bushel:
Gross crush margin per bushel:
Estimates only. Assumes about 44 lb of meal and 11 lb of oil per 60-lb bushel; actual yields vary, and this excludes all other operating costs.
What the crush spread measures
Crushing is the business of turning raw soybeans into two products: meal for livestock feed and oil for food and fuel. The crush margin is the spread between what those products sell for and what the beans cost. When the margin is wide, crushers run plants hard and bid up beans; when it is thin or negative, they slow down. That makes the crush a real-time read on processing demand for soybeans.
The same spread matters to people who never run a plant. Farmers watch it as a demand signal, and traders watch it because the three markets - beans, meal, and oil - are linked by physical arithmetic that keeps their prices from wandering too far apart for too long.
How to calculate the crush margin
Per 60-pound bushel, assume roughly 44 pounds of meal and 11 pounds of oil. Meal value is 44 divided by 2,000 (0.022 tons) times the meal price per short ton. Oil value is 11 times the oil price per pound. Add them and subtract the bean price. With beans at $10.50, meal at $300, and oil at 45 cents, the products are worth about $6.60 plus $4.95, or $11.55 - a gross margin near $1.05 per bushel.
Exchange-traded versions of the crush use fixed contract ratios rather than per-bushel math, and real plants have yields that vary with bean quality. This is a simplified gross margin - it ignores energy, labor, transport, and basis.
How processors and traders use it
Processors use futures to lock in the margin: buy bean futures, sell meal and oil futures, and the processing profit is fixed before the beans arrive. Speculators trade the same spread the other way when they think the margin will widen or narrow. Either way, the position is three-legged, and each leg has its own liquidity and basis risk.
Futures trading involves substantial risk of loss and is not suitable for all investors. A spread can move against you just as a flat price can, and three legs mean three sets of margin and costs.