Pronunciation: [kɹˈʌʃ spɹˈɛd] (IPA) 
The word "CRUSH SPREAD" is spelled with a "k" sound for the "c" and a "sh" sound for "sh", written as /krʌʃ sprɛd/. The "u" is pronounced as a short "uh" sound, followed by a "sh" sound for the "s" in "spread". The "e" in "spread" is pronounced as a short "eh" sound. Overall, the IPA phonetic transcription helps to clarify the correct pronunciation of the word "CRUSH SPREAD".
Crush spread refers to a trading strategy commonly used in commodity markets, specifically in the agricultural and energy sectors. It involves simultaneous buying and selling of different derivative contracts in order to profit from the price differentials among various commodities.
In the agriculture industry, crush spread typically refers to the trading of soybean futures contracts. Farmers and grain processors use this spread to hedge their exposure to the volatility of soybean prices. The spread involves initiating a combined position in soybean futures, soybean meal futures, and soybean oil futures. By doing so, it allows market participants to profit or protect themselves from changes in the soybean crush margin, which is the difference between the price of soybeans and the prices of soybean meal and soybean oil.
In the energy sector, particularly in the oil refining industry, the term "crush spread" also applies. It refers to the profitability of refining crude oil into gasoline and other petroleum products. Traders use the spread by simultaneously entering positions in crude oil futures, gasoline futures, and heating oil futures. This spread enables them to capture the profit or loss resulting from the refining process, taking into account the input cost (crude oil) and the output prices (gasoline and heating oil).
Overall, a crush spread is a trading strategy used to capitalize on the price differences between raw commodities and their derivatives, allowing market participants to hedge against price fluctuations or profit from market inefficiencies.
The term "crush spread" is derived from the world of commodities trading and specifically refers to the profitability spread between the price of soybeans and the products derived from them, such as soybean oil and soybean meal.
The term "crush" in this context refers to the process of physically crushing or extracting oil from soybeans in order to produce various products. Soybean oil and soybean meal are two of the main products obtained through the crushing process.
The spread aspect of the term "crush spread" refers to the difference or margin between the cost of soybeans and the combined value of the soybean oil and soybean meal produced. Traders and analysts use the crush spread as an indicator of profitability in the soybean processing industry.
