Soybean Meal is produced through processing and separating Soybeans into oil and meal components. By weight, Soybean Meal accounts for about 35% of the weight of raw Soybeans (at 13% moisture). 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 the 48% protein minimum.
Soybean Meal has become the world’s choice for protein supplement due to its high protein levels, amino acid balance, and overall nutrient content. It 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.
Soybean Meal futures provide a way to effectively manage the price risk that Soybean Meal merchandisers, food processors, livestock operations, importers and others have related to the purchase or sale of Soybean Meal. Futures contracts provide opportunities to identify short and long-term cyclical price and volatility patterns. Soybean Meal futures traders are able to take advantage of arbitrage and spread opportunities with other commodities, including related grains, oilseeds and livestock.
The Soybean Meal contract trades at the Chicago Board of Trade (CBOT), part of the CME Group. The electronic futures contract trades on Globex from 7:00 PM CT to 7:45 AM Sunday through Friday. As well as the primary hours of 8:30 AM CT to 1:20 PM Monday through Friday.
One Soybean Meal futures contract is 100 short tons, or approximately 91 metric tons. The previous settlement price (October 15, 2012) for December 2012 Soybean Meal futures was 456.1, or $45,610 per contract. The most common contract symbol is ZM.
One futures contract price increment or “tick” is 10 cents per short ton. A one “tick” move is $10.00. The next tick after 456.1 downward is 456.0 followed by 455.9. Therefore, a price move from 456.1 to 455.1 is $100.
The performance bond or initial margin requirement to initiate one futures contract position is $2,420 (as of November 11, 2015). To control that futures position going forward the maintenance margin is $2,200 (as of November 11, 2015).
The Daily Price limit is $20 per short ton, expandable to $30, when the market closes at limit bid or limit offer. For example, if the market closes at limit offer, or 436.1, on Tuesday, October 16, 2012, the next session’s Daily Price Limit would increase to $30. If the following trading session fails to close at the limit, the next session’s Daily Price Limit reverts to the $20 cap. The exchange resets daily limits for Soybean Meal in May and November of each year, based on a percentage of the average settlement price of benchmark contracts during a roughly nine-week observation period.
The Soybean Meal marketing year begins in October and ends in September. The futures contract month listings are January (F), March (H), May (K), July (N), August (Q), September (U), October (V), and December (Z).
The futures contract’s Last Trading Day (LTD) is the business day prior to the 15th calendar day of the contract month. The December 2012 Soybean Meal futures contract LTD is December 14, 2012 for example. The First Notice Day (FND) for that same contract is November 30, 2012.
Significant fundamental reports to be aware of are the United States Department of Agriculture (USDA) Crop Progress reports, typically released at 3:00 PM CT on Monday’s, and the periodic Crop Production and USDA Supply/Demand reports, typically released at 11:00 AM CT.
Visit https://www.danielstrading.com/ for additional contract specifications and market information regarding the Soybean Meal futures market.
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.
© 2021 StoneX Group Inc. All Rights Reserved