Soybean Meal Pit Dec '17 (SMZ17)
|Contract||Soybean Meal [Pit]|
|Tick Size||10 cents per ton ($10.00 per contract)|
|Daily Limit||$25 per ton ($2,500 per contract) Expanded limit $40|
|Contract Size||100 tons (2,000 pounds per ton)|
|Trading Months||Jan, Mar, May, Jul, Aug, Sep, Oct, Dec (F, H, K, N, Q, U, V, Z)|
|Trading Hours||8:30a.m. - 1:15p.m. CST|
|Value of One Futures Unit||$100|
|Value of One Options Unit||$100|
|Last Trading Day||The business day prior to the 15th calendar day of the contract month|
Soybean meal is produced through processing and separating soybeans into oil and meal components. If the soybeans are of particularly good quality, then the processor can get more meal weight by including more hulls in the meal while still meeting a 48% protein minimum. Soybean meal can be further processed into soy flour and isolated soy protein, but the bulk of soybean meal is used as animal feed for poultry, hogs and cattle. Soybean meal accounts for about two-thirds of the world's high-protein animal feed, followed by cottonseed and rapeseed meal, which together account for less than 20%. Soybean meal consumption has been moving to record highs in recent years. The soybean meal marketing year begins in October and ends in September.
Soybean meal futures and options are traded at the CME Group. The CME soybean meal futures contract calls for the delivery of 100 tons of soybean meal produced by conditioning ground soybeans and reducing the oil content of the conditioned product and having a minimum of 48.0% protein, minimum of 0.5% fat, maximum of 3.5% fiber, and maximum of 12.0% moisture.
Soybean crush - The term soybean "crush" refers to both the physical processing of soybeans and also to the dollar-value premium received for processing soybeans into their component products of meal and oil. The conventional model says that processing 60 pounds (one bushel) of soybeans produces 11 pounds of soybean oil, 44 pounds of 48% protein soybean meal, 3 pounds of hulls, and 1 pound of waste. The Gross Processing Margin (GPM) or crush equals (0.22 times Soybean Meal Prices in dollars per ton) + (11 times Soybean Oil prices in cents/pound) - Soybean prices in $/bushel. A higher crush value will occur when the price of the meal and oil products are strong relative to soybeans, e.g., because of supply disruptions or because of an increase in demand for the products. When the crush value is high, companies will have a strong incentive to buy raw soybeans and boost the output of the products. That supply increase should eventually bring the crush value back into line with the long-term equilibrium.
Prices - CME soybean meal futures prices (Barchart.com electronic symbol ZM) showed some strength in early 2014 but then fell sharply and posted a 3-year low in October 2014, finally closing the year down -16.7% at $364.6 per short ton.
Supply - World soybean meal production in 2014-15 rose +5.7% yr/yr to a new record high of 199.494 million metric tons. The world's largest soybean meal producers are China with 29.6% of world production in 2014-15, the U.S. with 19.5%, Argentina with 14.8%, and Brazil with 14.5%. U.S. production of soybean meal in 2014-15 rose +5.2% yr/yr to 42.785 million short tons, below the 2006-07 record high of 43.054. U.S. soybean meal stocks in 2014-15 (Oct 1) fell -9.1% yr/yr to 250,000 short tons, below the decade high of 383,000 short tons in 2001-02.
Demand - World consumption of soybean meal in 2014-15 rose +5.1% yr/yr to 194.341 million metric tons, a new record high. The European Union accounted for 15.0% of that consumption and the U.S. accounted for 14.1%. U.S. consumption of soybean meal in 2014-15 rose +2.4% yr/yr to 27.398 million metric tons.
Trade - World exports of soybean meal in 2014-15 rose +6.5% to 63.507 million metric tons. Argentina accounted for 43.8% of world exports and the U.S. accounted for 18.3%. World imports of soybean meal in 2014-15 rose +5.2% yr/yr to 60.288 million metric tons. U.S. exports of soybean meal in 2014-15 rose +10.8% yr/yr to 12.800 million short tons. U.S. imports of soybean meal in 2014-15 fell -50.9% yr/yr to 165,000 short tons, remaining well below the record high of 285,000 short tons seen in 2003-04.
Articles from the Commodity Research Bureau (CRB) Commodity Yearbook. The single most comprehensive source of commodity and futures market information available, the Yearbook is the book of record of the Commodity Research Bureau, which is, in turn, the organization of record for the commodity industry itself. Its sources - reports from governments, private industries, and trade and industrial associations - are authoritative, and its historical scope is second to none. Additional information can be found at www.crbyearbook.com. More commodity data from Commodity Research Bureau.
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