Where Does All the Meal Go?
Soybean meal is the primary input to animal feed in industrialized agriculture worldwide, used as a valuable source of protein for raising pigs and poultry. Accordingly, soybean production and importation generally supports meat production, though soybean meal is also consumed by humans in the form of tofu, soy milk and imitation meat, in addition to industrial use. Soybean meal is produced through a process called crushing, whereby whole soybeans are processed to produce soybean meal and soybean oil.
Each year, soybeans vie with corn for the title of most widely planted crop in the United States. Brazil is the world’s largest producer of soybeans and leads the world in soybean exports, though China crushes the competition in terms of soybean meal production. Although China is not a major importer of soybean meal, the country is the world’s top importer of soybeans, sustaining the country’s significant crushing industry. China is a major producer but minimal exporter of meal: China’s domestically produced soybean meal is overwhelmingly consumed by the nation’s livestock.
Top 5 Soybean Meal Producing Countries
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This is the first article of a series designed to help you maximize trading opportunities in the Soybean complex.
- Part 1: Where Does All the Meal Go?
- Part 2: What is oil share?
- Part 3: Biofuel Feedstocks in the United States
- Part 4: Biofuel Feedstocks in the European Union
- Part 5: Soybean Sustainability in the United States
Argentina takes the top spot in soybean meal exports in 2024/2025, ranking behind China, Brazil, and the United States in soybean meal production in the last full marketing year. The European Union is the world’s largest importer of soybean meal, taking in almost 50% more than it produced in the latest marketing year.
Over the last two decades, an increasing share of soybeans have been exported, eroding the share crushed domestically. Although in the 2016/2017 and 2020/2021 marketing years, the share of soybeans exported exceeded that crushed domestically, domestic crushing has regained prevalence in recent years.
U.S. Disappearance of Soybeans
Soybean meal exports are expected to reach a record 30% of total domestic production in the current 2024/2025 crop year, totalling 17.4 million short tons. The Philippines is the primary recipient of U.S. soybean meal, with imported meal a pillar of the nation’s meat industry.
Soybean meal produced in the United States overwhelmingly falls under the U.S. Soy Sustainability Assurance Protocol, a verified framework ensuring sustainable sourcing of U.S. soy. Since 1980, soybeans in the United States, on average, use 47% less acres per bushel, 61% less water acre inches per bushel and 45% less BTU per bushel of energy. Greenhouse gas emissions and soil erosion have been reduced by 42% and 35% in terms of pounds of CO2e and tons of soil erosion per bushel, respectively.
U.S. Disappearance of Soybean Meal
Perhaps the most dynamic force in the soybean complex landscape over the past decade has been the increasing strength of Brazil as a producer and exporter and Brazil’s evolving relationship with China as that country’s imports grow. For the first decade of China’s growth in soybean importation, the United States was the primary country of origin. In the last decade, however, the majority of soybeans imported by China were from Brazil.
Soybean Oilshare futures and options: a new way to trade the crush
Until the advent of biomass-based diesel and national blending mandates propelling soybean oil to the forefront of the biofuel landscape, soybean crushing was widely accepted to be motivated by demand for soybean meal. Now, with the renewable fuel standard sustaining a powerful policy market for soybean oil, meal and oil share the basis of demand for soybean production and crushing. Since the turn of the century, the share of domestic disappearance of soybean oil to renewable fuels increased from negligible to approaching 50% in the latest crop year. During that time, domestic crushing increased 47%, indicating that new crushing was driven by demand for fuel. This increase in crushing has, as discussed, transformed the soybean meal landscape.
U.S. Domestic Disappearance of Soybean Oil
Soybean Oilshare futures and options present market participants with a new way to hedge their exposure or express a view on the relative value of soybean oil to soybean meal. Soybean Oilshare futures are financially settled to the CME Soybean Oilshare Index®, which is calculated daily using Soybean Oil and Soybean Meal futures prices.
The CME Soybean Oilshare Index calculation establishes common units between Soybean Oil futures, which are quoted in pounds, and Soybean Meal futures, which are quoted in short tons. Soybean Oilshare represents the relative value of soybean oil in the revenue of crushing one bushel of soybeans. The higher the CME Soybean Oilshare Index, the higher the relative value of Soybean Oil to Soybean Meal futures. Conversely, if Soybean Meal futures increase in price while Soybean Oil futures do not, the CME Soybean Oilshare Index would fall.
CME Soybean Oilshare Index (COSI1)
As the soybean complex landscape evolves, CME Group will continue to be the foremost venue for hedging risk or expressing a market view. Learn more at www.cmegroup.com/soybeans and www.cmegroup.com/markets/agriculture/oilseeds/soybean-oilshare.html
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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.
