Market Augmentation of the U.S. Soybean Crush Spread
Category
Business, Education and Humanities
Department
Finance, Business Economics
Student Status
Undergraduate
Research Advisor
Dr. Michael Davidsson
Document Type
Event
Location
Sunflower
Start Date
10-4-2025 11:20 AM
End Date
10-4-2025 11:20 AM
Description
The soybean crush spread is a key profitability measure in the soybean processing industry that relates the difference between the combined weighted values of soybean meal and soybean oil and the average domestic price of soybeans. The goal of this study is to identify and measure the factors influencing the U.S. soybean crush spread through key macroeconomic, market-specific, and commodity price variables for the period of 1986-2023. Additionally, the study assesses how regulatory shifts in governmental biofuel policy impact soybean oil demand, and, by extension, the crush spread. This econometric study utilizes a linear OLS regression technique to model the change in the dependent variable, the average crop-year soybean crush spread, with average U.S. corn price, soybean use, crude oil price, ethanol production, livestock feed demand, freight costs, U.S. dollar index, and shifts in renewable fuel policy as the independent variables. Preliminary results show that corn prices, soybean use, ethanol production and freight costs were a positively correlated with the soybean crush spread, while oil prices, feed demand, and biofuel policy implementation were negatively correlated with the crush spread.
Market Augmentation of the U.S. Soybean Crush Spread
Sunflower
The soybean crush spread is a key profitability measure in the soybean processing industry that relates the difference between the combined weighted values of soybean meal and soybean oil and the average domestic price of soybeans. The goal of this study is to identify and measure the factors influencing the U.S. soybean crush spread through key macroeconomic, market-specific, and commodity price variables for the period of 1986-2023. Additionally, the study assesses how regulatory shifts in governmental biofuel policy impact soybean oil demand, and, by extension, the crush spread. This econometric study utilizes a linear OLS regression technique to model the change in the dependent variable, the average crop-year soybean crush spread, with average U.S. corn price, soybean use, crude oil price, ethanol production, livestock feed demand, freight costs, U.S. dollar index, and shifts in renewable fuel policy as the independent variables. Preliminary results show that corn prices, soybean use, ethanol production and freight costs were a positively correlated with the soybean crush spread, while oil prices, feed demand, and biofuel policy implementation were negatively correlated with the crush spread.
