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
Recent Posts on Soybeans
- Today’s Taylor Trading Technique Trade in Soybean Futures (6/26/2015) - The Taylor Trading Technique seeks to identify market actions (moves) and then anticipate likely reactions in the opposite direction. The past two sessions in the soybean futures have been a good example of the action – reaction cycle.
- Today’s Breakout Setup Trade in Soybean Futures (6/25/2015) - In this morning’s watch list for Swing Trader’s Insight I commented that a rally above yesterday’s high could see follow through. This turned out to be a good trade opportunity; let’s take a look at it.
- TWIG Afternoon Edition for 2015-09-22 (6/22/2015) - Corn and wheat are being dragged along so to speak on too much moisture concerns, for corn its too much moisture and too little degree growing units thus far in the year.