Soybean Meal Futures

Soybean meal futures provide exposure to the price of meal produced when soybeans are processed. Meal is used in animal feed. It is a separate product from soybean oil and whole soybeans, so their prices do not have to move together.

Contract specifications

Exchange / code	CBOT / ZM
Contract size	100 short tons; one short ton is 2,000 pounds
Quotation	U.S. dollars per short ton
Minimum price movement	$0.10 per short ton = $10 per contract
Settlement	Physical delivery under exchange rules

This summary describes the standard contract. Confirm the selected expiry, delivery terms and current exchange rules. CBOT Chapter 13 — Soybean Meal Futures.

A worked example

Suppose you buy one contract at $300 per short ton and close it at $310. The $10 increase multiplied by 100 short tons gives a $1,000 gain before costs. A decline to $290 produces a $1,000 loss. The initial notional value is $30,000; the margin deposit is not the purchase price or a cap on loss.

Long futures P/L = (exit price − entry price) × 100 × number of contracts

For a short position, reverse the price difference. These examples assume an offsetting trade in the same contract month and exclude commissions and slippage. They are illustrations, not forecasts.

Market drivers and hedging

Feed demand, soybean availability and processing activity can affect meal prices. A feed buyer may use a long hedge against rising input prices; a producer may use a short hedge against falling selling prices. Differences in local price, quality and timing leave basis risk, so a futures hedge does not guarantee an exact cash-market price.

Margin, expiry and delivery

Futures use margin and are marked to market. Adverse moves can require additional cash, and losses can exceed the initial deposit. Daily price limits and thin liquidity may prevent an immediate exit. A stop order does not guarantee an execution price.

These contracts permit physical delivery. Traders who do not intend to make or receive delivery need to close or roll positions before their broker's applicable deadline, which may precede exchange notice or expiry dates. Rolling means closing one expiry and opening another; the prices and costs can differ.