Soybeans are undeniably one of the most popular and versatile crops globally, with the wide applications that touch the lives of billions. Even though the first soybean plant was cultivated thousands of years ago in Asia, it remains a vital component of global agriculture and nutrition.
Soybeans find their way into a wide array of products, from soy sauce and tofu in Asian cuisine to soybean oil, a common cooking oil. Notably, soybeans also serve as a primary source of protein in animal feed, contributing to livestock production worldwide.
Due to its high demand, Soybean futures are among the most actively traded futures contracts globally. Two major exchanges that offer soybean futures contracts are the Dalian Commodity Exchange (DCE) and the Chicago Board of Trade (CBOT). Both exchanges play a pivotal role in soybean futures trading, and their contracts are widely used by market participants for hedging and speculative purposes.
As we enter the last quarter of 2023, this article aims to provide updates on soybean futures prices and market news.
DCE Soybean Futures
Traders can access Dalian Commodity Exchange Soybean Futures through the QFI China Scheme or Internationalized Products. To do so, international traders would have to go through an overseas intermediary, like Orient Futures Singapore.
To learn more about Dalian Soybeans futures contracts, including DCE Soybean No.1 and 2, DCE Soybean Meal Oil Futures, and DCE Soybean Meal Futures, you can find additional information by clicking here.
Please note that Dalian Commodity Exchange trading hours are as follows:
DCE Trading Hours
9:00AM - 11:30AM and 1:30PM - 3:00PM Beijing Time.
CBOT Soybean Futures
Traders can also access Soybean Futures from CBOT through Orient Futures International Singapore. The Chicago Board of Trade (CBOT), based in the United States, is a major global exchange for soybean futures. CBOT soybean futures contracts are widely used by market participants worldwide and play a significant role in global soybean price discovery and trading.
To find out more about CBOT Soybean Futures and the CBOT Soybean Contract Specifications, including CBOT Soybean Soybean Meal Futures, and CBOT Soybean Oil Futures, you can find additional information by clicking here.
Please note that Chicago Board of Trade trading hours are as follows:
CBOT Trading Hours
8:30 am – 1:20 pm CT (Monday to Friday)
Apart from Soybean Futures, both CBOT and DCE also offer other commodity futures such as Iron Ore Futures, Rough Rice Futures, and more.
Soybean Market News
This latest soybean market news is based on Orient Research Weekly Report on Agricultural Products dated 11 September 2023 and other sited sources.
Soybean Supply and Demand
In China Soybean production regions, the remaining grain supply has essentially reached its lowest point, with most of the circulating soybeans being stored reserves. Some new soybeans have entered the market in the southern regions, and both domestic and imported soybean auctions have been contributing to the market's supply.
While many auctions have resulted in premium transactions, the overall transaction rate has seen a slight decline. Additionally, there has been a recent weakening of downstream demand, leading to a cautious outlook in the market. The decrease in imported soybean prices has also indirectly affected market sentiment.
Soybean Meal Supply & Demand
According to a Reuters survey, analysts are expecting the US soybean yield to decrease from 50.9 to 50.2 bushels per acre, with year-end stocks expected to decrease from 245 million bushels to 207 million bushels. Overall, it is believed that the tight balance sheet for U.S. soybeans in the 2023/24 season is unlikely to change significantly.
In the Chinese market, customs data indicates that China imported 9.362 million metric tons of soybeans in August, significantly surpassing previous market estimates. Additionally, weekly soybean auctions have contributed to increased market supply. However, despite rising soybean meal prices and downstream buyers increasing their stockpiles, there has been a notable decrease in the willingness to buy soybean meal.
As of September 1st, soybean meal inventories in oil mills increased by 68,400 metric tons to reach 720,200 metric tons. While a decline in soybean imports in September and October is expected, for prices to continue rising after sufficient trading, additional bullish factors will be required.
Traders need to monitor for potential bullish influences including the USDA supply and demand report, conditions of US inland rivers, and the water levels of the Panama Canal.
Soybean Oil Supply & Demand
Market attention is gradually shifting towards the planting and growth of South American soybeans and the weather conditions there. The El Niño climate pattern, in theory, should favor the planting and production of South American crops. However, whether the actual weather conditions will develop as expected requires close monitoring.
On the demand side, domestic crushing profit and domestic demand in the United States remain strong. Nevertheless, pressure from Brazil's old crop stocks sales continues to exist and will continue to affect the demand for U.S. soybean exports.
Considering that the fourth quarter is the period when China needs to purchase a large amount of soybeans and the tight supply of US soybeans, the market's downside potential is limited.
In the Chinese market, Mysteel's agricultural research has reported that commercial soybean oil inventory in key areas across the country was approximately 1.0033 million metric tons. This marks a decrease of 27,200 metric tons from the previous week and the fifth consecutive week of decline.
The current inventory level is medium to low compared to the same period in previous years. Lower soybean arrivals in August and a decrease in oil mill operating rates have constrained soybean oil production.
Furthermore, the upcoming start of the school year and the Mid-Autumn Festival and National Day holidays are expected to generate stockpiling demand, slowing down the accumulation of soybean oil stocks in China. Given the overall fundamentals of soybean oil and palm oil, the upward momentum for soybean oil is weakening, and the outlook points towards weak fluctuations.
Soybean Futures Price
According to Trading Economics, the Soybean prices made a notable recovery, reaching $13.6 per bushel in early September. This comes close to the recent four-week peak of $14 recorded on August 28.
This surge was triggered by a weekly report from the US government, which disclosed a more substantial deterioration in crop conditions than originally anticipated. According to the US Department of Agriculture's report, only 53% of the US soybean crop received a good to excellent rating. This marked a significant 5 percentage point decline compared to the previous week and fell below the 55% consensus forecasted by analysts.
It is worth noting that this rating is the lowest for this time of the year since 2012, a year that is remembered for its historic drought.
Adding to the bullish sentiment for soybeans, the USDA data also revealed that exporters had successfully sold 251,000 metric tons of US soybeans to undisclosed destinations.
Start Trading With Orient Futures Singapore
Being an Overseas Intermediary of Shanghai International Energy Exchange (INE), Dalian Commodity Exchange (DCE), and Zhengzhou Commodity Exchange (ZCE), when foreign clients participate in internationalised futures contracts in these Chinese markets with us, they have direct access to trading, clearing, and settlement. Our parent company, Shanghai Orient Futures, is the largest broker in terms of aggregated volume across the five regulated exchanges in China.
Orient Futures Singapore also currently holds memberships at the Singapore Exchange (SGX), Asia Pacific Exchange (APEX), and ICE Futures Singapore (ICE SG). Starting August 2023, corporate clients can also gain access to the B3 Exchange through us.
We provide bespoke services to our professional clients, tailored to their corporate and individual needs. Our team will be there for you 24 hours on trading days to provide a one-stop portal for all your trades, with simple processes and an intuitive user interface that has low or near-to-zero latency.
