How to Invest in Soybean Meal
Soybean meal is a flour that is produced from the residue of soybean oil production. It is used as a source of protein for animals, including pigs, chicken, and cattle.
Soybean meal is an investable asset thanks to the development of a futures market linked to this commodity. Though the market is considerably smaller than those dedicated to other agricultural commodities, investors seeking exposure have options available to them.
Ways to Invest in Soybean Meal
There are 2 ways to invest in Soybean Meal: ETFs and Futures. Click on the tabs below to learn more about each alternative.
What are Soybean Meal ETFs?
There are no pure play soybean meal exchange-traded products currently available, but this commodity is included in certain broad-based agricultural commodity ETPs. The E-TRACS CMCI Food Total Reutrn ETN (FUD) allocates about 5% of the underlying holding to soybean meal. Because other food commodities make up the vast majority of holdings, changes in soybean meal prices will have only a minor impact on FUD\’s price.
What are Soybean Meal Futures?
Soybean meal futurs are traded on the Chicago Board of Trade under the symbol SM (under the symbol ZM for CME Globex trading). Soybean meal futures contracts represent 100 short tons, or approximately 91 metric tons. The deliverable grade requires 48% Protein Soybean Meal, meeting the requirements listed in the CBOT Rules and Regulations.
Contract months for soybean meal futures are January (F), March (H), May (K), July (N), August (Q), September (U), October (V) and December (Z). The last trading day is the business day prior to the 15th calendar day of the contract month.
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