The three main producers of soy in the world are, in the following order: the U.S., Brazil, and Argentina. However, soybeans were essential to Asian cultures for hundreds of years before Western cultivation began, and today China falls just outside of the top three producers into the number four slot. Farmers enjoy the benefits of planting soybean because it clears the field for other food crops and naturally fixes the nitrogen levels in the soil that otherwise inhibit the growth of some plants. In the U.S., soybean was not even used as a food product until after the 1920s, before which it was largely considered exclusively an industrial product.
|Soybean Futures Contract Specifications|
|Contract Size||5,000 bushels (~136 Metric Tons)|
|Deliverable Grade||#2 Yellow at contract price,|
#1 Yellow at a 6 cent/bushel premium,
#3 Yellow at a 6 cent/bushel discount
|Pricing Unit||Cents per Bushel|
|1/4 of one cent per bushel ($12.50 per contract)|
|Contract Months/Symbols||January (F), March (H), May (K), July (N), August (Q), September (U) & November (X)|
|Trading Hours||CME Globex (Electronic): Sun-Fri 7:00pm-7:45am CT|
Mon-Fri 8:30am-1:15pm CT
|Open Outcry (Trading Floor): Mon-Fri 8:30am-1:15pm CT|
|Daily Price Limit||$0.70 per bushel expandable to $1.05 and then to $1.60 when the market closes at limit bid or limit offer. There shall be no price limits on the current month contract on or after the second business day preceding the first day of the delivery month.|
|Settlement Procedure||Physical Delivery|
|Last Trade Date||The business day prior to the 15th calendar day of the contract month.|
|Last Delivery Date||Second business day following the last trading day of the delivery month.|
|Product Ticker Symbol||CME Globex (Electronic): ZS (S=Clearing)|
Open Outcry (Trading Floor): S
|Exchange Rules||These contracts are listed with, and subject to, the rules and regulations of CBOT.|
|Source: CME Group|
Soybeans are of one of the most active and popular markets to trade, and dominant oilseed in the U.S. According to the U.S. Department of Agriculture (USDA), the U.S. is the leading producer and exporter of soybeans, mainly exporting to China, EU, Japan, Mexico and Taiwan. Soybeans account for 90% of all oilseed production in the U.S. accounting for 44% of the world’s Soybean export in 2010 and 35% of the world’s Soybean production in 2010.
After corn, soybeans are the most planted crop with over 77.5 million acres planted every year, 80% of which are grown in the Upper Midwest. Soybeans are typically grown in a crop rotation with corn. Soybean planting season takes place in late Spring and then are harvested in early Autumn. They were also among the first crops to be bioengineered and receive commercial success, especially since most are resistant to herbicides. Soybeans make up the largest portion of biotech crops grown in the U.S.
Soybeans have two main byproducts — soybean meal and soybean oil. Soybean meal is a flour made by grinding the solid residue of soybean oil production and is primarily used for animal feed due to its high protein content. Soybean oil is a “vegetable oil” that is extracted by crushing soybeans. It is mainly used as cooking but is also used in an extensive list of food products. Soybean oil has also grown in popularity due to the introduction of Biodiesel.
Last updated May 2013
Soybean News Articles
- Corn, soybean futures impacted by weather (4/15/2014) - Corn and soybean futures were traveling in opposite directions on Tuesday, according to Bloomberg.
- Soybean futures rise amid speculation about falling supplies (4/9/2014) - Confidence about the U.S. slashing inventories prompted soybean futures to climb in value on Wednesday as wheat and corn futures also pushed higher during the midweek trade session, according to Bloomberg.
- Soybean futures dive for third-straight day of losses (3/12/2014) - Speculation about reduced demand tugged down soybean futures on Wednesday as the legume marked a third consecutive trading session of losses, according to Bloomberg.
- Soybean futures rise as Brazil endures drought (2/19/2014) - Inclement weather in a top-growing region prompted soybean futures to drive toward their top price in about eight weeks on Wednesday, according to Bloomberg.
- Soybean futures slip second-straight day (1/8/2014) - The prospect of strong harvests in North and South America prompted soybean futures to lose value on Wednesday as the legume marked a second consecutive trade session of losses, according to Bloomberg.
- Soybean futures dip for second-straight day (11/15/2013) - Strong weather prospects in the world's largest export market prompted soybean futures to lose value on Friday as the legume marked a second consecutive trade session of losses after climbing earlier this week, according to Bloomberg.
- Soybean futures slip as concerns grow about harvest (10/7/2013) - Inclement weather in the Midwest of the U.S. is likely to harm harvests as crops are left in vulnerable positions in strong growing region of the nation, according to Bloomberg.
- Soybean futures dive as rain forecast to slow in the Midwest (9/16/2013) - Forecasts for rainy weather to cease in the U.S. Midwest prompted soybean futures to slip on Monday, according to Bloomberg.
- Soybean prices dip as pessimism over weather outlook diminishes (9/5/2013) - Speculation that the pessimistic weather outlook in the U.S. may have been overstated drove down soybean prices for a second consecutive day on Thursday, according to a published report.
- Soybean futures climb as strong heat forecast (9/3/2013) - Soybean futures achieved their top gains in one week on Tuesday amid inclement weather in regions of the U.S. Midwest, according to Bloomberg.
Soybean Blog Posts
- Turner’s Take – Corn, Soybean & Crude Oil (2/20/2014) - March corn is now trading above $4.50 and has stopped us out of our short position from $4.25. While I remain bearish on corn prices for 2013/14 and 2014/15, you can’t deny these low US corn prices have spurned demand from exports, ethanol and animal feed.
- This Week in Grain – 2/10-2/14 (WASDE Wrap!) (2/12/2014) - The USDA released their February WASDE report this morning (February 10). The February report is not normally a big market mover and the report followed suit as there were a few surprises, but not enough to get the corn, soybeans or wheat markets above resistance levels or below support levels…yet.
- WASDE Recap (12/11/2013) - The grain data came fast and furious all day! It started with Brazil forecasting their production this morning, followed by the USDA giving us their take on everything but old crop supplies (those will come in the JAN report). While the results of today’s report may have not inspired much volatility at 11 am, I did notice a few things that may become trends over what is left of 2013 and the start of 2014.
- Welcome to WASDE Week (11/5/2013) - I feel excited to say for the first time in 9 weeks, WELCOME TO WASDE WEEK! The last time we heard from the USDA regarding WASDE data, it was September 12th. Since that day, we have seen prices move dramatically in grains and oilseed markets.
- The Bullish Spiral of the Soy Complex (6/20/2013) - There is not enough soymeal in the United States to meet demand. To help meet demand, crushers were planning on turning beans into meal using cheaper South American imports, as there is a lot of product available and the crush margins would be well in the green to support their efforts. But, because of the Brazilian port situation, the beans are not coming as quickly as the crushers wanted. The cheap product they could turn into expensive meal is apparently not in the cards.
- Market Spotlight: Soybean Oil (3/14/2013) - Soybean Oil is the natural oil extracted from whole Soybeans. Typically, about 19% of a Soybean’s weight can be extracted as crude Soybean Oil. The oil content of U.S. Soybeans correlates directly with the temperatures and amount of sunshine during the Soybean pod-filling stages.
- Beyond the “Spotlight” (3/11/2013) - The Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.
- Beyond the “Spotlight” (3/4/2013) - The Trade Spotlight advisory service applies the GBE trading methodology (buying or selling commodity contracts based on breakouts of chart formations and technical indicators) to identify one to two trade setups per week.
- Turner’s Take: USDA Report on Friday (2/6/2013) - This is a sample entry from Craig Turner’s weekly market analysis newsletter, Turner’s Take, published on February 04, 2013. In this issue: MACRO Markets: Cash continues to leave the sidelines and get in the game. CORN: Drought conditions in WCB getting better with recent rains. We continue to hold bear spread new crop CZ/CU from... Read More.
- Consequences of the USDA Releasing Reports during Market Hours (2/6/2013) - In the good old days the USDA would release reports at 7:30 AM central when the Grain markets were closed and we would open up two hours later at 9:30 AM central. This gave market participants enough time to read the report, evaluate the numbers, and begin the next session as informed traders. Now the... Read More.