The Crush Spread is the difference between the cost of soybeans and the revenue from the sale of their processed products — soybean meal and soybean oil. It is used as a measure of soybean processing profitability and is actively traded in commodity futures markets. A widening crush spread signals increasing profitability for processors, while a narrowing spread indicates declining margins.
Example
“A soybean processor monitors the crush spread by comparing the cost of raw soybeans against the combined revenue from selling soybean meal and soybean oil. When the spread widens, it signals higher processing margins and may encourage increased production.”