SUBSCRIBER NOTE: Platts proposes to launch CFR China soybean crush Oct. 16

S&P Global Platts proposes to launch a daily CFR China soybeans crush margin, effective Oct. 16, 2020.

The launch of the calculation will bring together Platts SOYBEX CFR China soybeans, and DCE soybean oil and meal prices on the domestic market.

The crush margin calculation is part of efforts to bring further transparency to global oilseeds, vegetable oil and animal feed markets.

China has the world's largest soybean crushing capacity with an average volume of 90.3 million mt of soybeans crushed over the past five years, representing 30% of volume of soybeans crushed globally, according to USDA data.

China is also the world's largest importer of soybeans -– importing more than 60% of soybeans traded worldwide, or 93.4 million mt of soybeans on average over the past five years.

The proposed CFR China soybean crush margin calculation would compare Platts SOYBEX CFR China M1 shipment price assessment and the domestic soybean meal and oil values represented by DCE soybean meal and oil futures.

To calculate the gross crush margin, Platts proposes to use the most liquid months of DCE's soybean meal and oil futures contracts: January, May and September at the 3 pm Beijing closing time.

Based on market feedback, Platts proposes to publish the gross China soybean crush margin with a 79% soybean meal yield and a 19% soybean oil yield.

The soybean crush calculation would be as follows:

DCE Soybean Meal x 0.79 + DCE Soybean Oil x 0.19 minus the Handling cost at 50 CNY/mt and minus the cost of imported soybeans (CFR China SOYBEX M1), adding the 3% import tax and the 9% VAT.

Platts proposes to publish the crush margin value in dollars per metric ton.

All values in yuan/mt are proposed to be converted into dollars/mt using the relevant exchange rate published by the Bank of China.

The gross crush margin will be time-stamped at 4.30 pm Singapore time and will follow Singapore and China holidays schedules.

Please send all feedback and questions by Sept. 11 to asia_ags@spglobal.com and pricegroup@spglobal.com.

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