Goldman exits CBOT short soybean crush spread

(Reuters) – Investment bank Goldman Sachs said on Monday it recommended exiting short Chicago Board of Trade soybean crush spread positions based on it latest market outlook.

In a note to clients, Goldman said the current value of the CBOT July soy crush spread was 3 cents a bushel, versus 47 cents on April 10, the day it recommended the trade, equating to a 44 cent profit.

The soybean crush spread – buying (or selling) Chicago Board of Trade soybean futures contracts and simultaneously selling (or buying) CBOT soymeal and soyoil contracts – is a popular trade to capture the profit of crushing soybeans into soymeal and soyoil.

Goldman had recommended in April shorting the spread – buying soybeans and selling meal and oil.

Goldman also expects the CBOT August crush margin to decline from its current level of 25 cents a bushel “especially as the U.S. new-crop soybean harvest will likely be delayed this fall,” the note said.

The U.S. Department of Agriculture reported late Monday that U.S. farmers had planted 71 percent of their intended soy acres as of Sunday, down from the usual pace of 84 percent by the first week of June.