This piece explores the value proposition of Soybean Oilshare futures and options relative to trading outright Soybean Oil and Soybean Meal futures. Soybean oilshare refers to the relative value of soybean oil within total soybean crushing revenue. Soybean crushing was once driven primarily by the demand for soybean meal, a highly perishable, high-protein input to animal feed. In recent years, however, global biofuel policy has created increased demand for soybean oil, which is now understood to drive soybean crushing decisions in the United States.
While traders have historically approximated soybean oilshare from trading a specific ratio of Soybean Oil and Soybean Meal futures, market participants may now trade futures and options settling to the CME Soybean Oilshare Index(R), which is calculated daily from Soybean Meal and Oil futures settlement prices, saving margin and allowing for precision exposure to volatility in the relative value of soybean oil to meal.
One 60-pound bushel of soybeans on average yields 11 pounds of soybean oil and 44 pounds of soybean meal. Converting Soybean Oil and Soybean Meal futures to equivalent units, Soybean Oilshare can be derived using the following formula, which underlies the CME Soybean Oilshare Index to which Soybean Oilshare futures settle:
Where:
BO = Settlement price for the referencing Soybean Oil futures
SM = Settlement price for the referencing Soybean Meal futures
For more information on the CME Soybean Oilshare Index calculation, see What Is Oilshare?.
Nearby Soybean Oilshare
While soybean oil comprises only 20% of the output of the bean by weight, soybean oilshare surpassed 50% in recent months, driven by an ambitious renewable fuel policy released in June 2025. This marks a huge increase from its low of just over 25% in 2014 and dip to 28% in March of 2020.
Legging the ratio vs. trading Soybean Oilshare futures
Hedgers in recent years may have commonly traded a ratio of five Soybean Oil futures and three Soybean Meal futures, because in this combination, a one tick move in either Soybean Oil futures or Soybean Meal futures is worth $30 ($6 per tick per contract * 5 contracts for Soybean Oil and $10 per tick per contract * 3 contracts for Soybean Meal).
A number of issues make this strategy less convenient for many participants compared to trading Soybean Oilshare futures. The first being a lack of linearity in changes in value of the Soybean Oil - Meal spread. A soybean oilshare value of 50% could exist in an environment where Soybean Oil and Meal futures prices are low, moderate or high. In a low price environment, a one-tick increase in either Soybean Oil or Soybean Meal changes the soybean oilshare value to a greater degree than would a one-tick move in a high price environment. Soybean Oilshare futures, conversely, hold a steady value per tick regardless of underlying Soybean Meal and Oil futures prices.
Secondly, trading legs of Soybean Oil (ZL) and Soybean Meal (ZM) to approximate Soybean Oilshare carries significantly larger margin requirements than outright Soybean Oilshare futures (OSF). At present, maintenance margin (note: subject to change) stands at $2,100 for leading month Soybean Oil futures and $1,500 for Soybean Meal futures per contract, totalling $15,000 (($2,100*5)+($1,500*3)) to approximate Soybean Oilshare using a 5:3 Oil to Meal futures ratio. Soybean Oilshare futures, which are significantly smaller than the other Soybean complex futures in terms of notional exposure, require maintenance of only $700 per contract. The table below provides an example comparison at current prices.
| Strategy | ZL:ZM :: 5:3 | 1 OSF |
|---|---|---|
| Tick value | Not linear | Linear; 0.025 per index point = $10.00 |
| Maintenance margin | $15,000 | $700 |
| Notional exposure (five year average) | $267,472 | $16,291 |
| Price limits | Yes | No |
| Position limits | Yes | No |
| Settlement | Physical | Financial |
The table below compares the maintenance margin and notional exposure of a 5:3 Soybean Oil to Meal futures ratio to 15 Soybean Oilshare futures. At five-year average prices, the notional exposure of 15 OSF comprises 97.5% of that of the Oil-Meal spread, while requiring only 75% of the margin.
| Strategy | ZL:ZM :: 5:3 | 15 OSF |
|---|---|---|
| Maintenance margin | $15,000 | $11,200 |
| Notional exposure (five year average) | $267,472 | $260,656 |
An additional benefit of Soybean Oilshare futures is that participants are not constrained by daily price limits, allowing trading in the contract while Soybean Oil and/or Meal futures may be locked. Additionally, no position limits on the contract allows for even greater flexibility.
Discover more about Soybean Oilshare futures and options.
All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.
