Soybean Futures
Soybeans are a versatile and vital agricultural commodity that plays a crucial role in the global market. As a primary source of protein and oil, soybeans are widely used in various industries.
Soybean meal, a byproduct of soybean processing, is a valuable livestock feed known for its high protein content. Livestock, poultry, and aquaculture industries heavily rely on soybean meal as a nutritious feed ingredient.
Additionally, soybean oil extracted from soybeans serves as a key edible oil, finding applications in cooking, food manufacturing, and industrial processes.
Given the importance of the various soybean products, Soybean Futures, Soybean Meal Futures and Soybean Oil Futures are all popular futures contracts that are actively traded on global commodity exchanges.
The Dalian Commodity Exchange (DCE) and the Chicago Board of Trade (CBOT) are two major exchanges providing different soybean futures contracts. These contracts are essential for market participants engaging in hedging and speculative activities.
As we get into the year of 2024, this article aims to give updates of Soybean futures in the month of February.
Trading Soybean Futures and Options
Traders can trade various soybean futures and options from both the Dalian Commodity Exchange (DCE China) and Chicago Board of Trade (CBOT) through Orient Futures International Singapore. This includes Soybeans, Soybean Meal and Soybean Oil Futures.
To trade Dalian Soybean Futures contracts (Soybean No.1 and 2), International traders would require an overseas intermediary like Orient Futures Singapore, through either the QFI China Scheme or the Internationalized products.
DCE Soybean Futures Contract Specification
The DCE Soybean Futures Contract has the following specifications:
The DCE Soybean Futures Contract has a minimum price fluctuation of CNY 1/metric ton.
Contract months are January, March, May, July, September, and November.
The last trading day of the contract month is the 10th trading day of the delivery month.
Dalian Commodity Exchange trading hours are from Monday to Friday, at these trading hours:
9:00AM - 11:30AM and 1:30PM - 3:00PM Beijing Time
DCE Soybean Futures Ticker Symbol: A
Click to find out more on DCE trading hours, CBOT trading hours and also DCE and CBOT Soybean Contract Specifications.
Apart from Soybean Futures, both CBOT and DCE also offer other commodity futures such as Iron Ore Futures, Rough Rice Futures, and more.
Soybean Futures Market News
This latest soybean market news is based on Orient Research Weekly Report on Agricultural Products dated 29th January 2024 and other sited sources.
Soybean Supply and Demand
Central-west and North Brazil are expected to receive favorable rainfall in the next 1-2 weeks, improving Brazil's soybean production prospects. Despite initial planting delays due to drought this season, Safras reported that harvest was about 9% completed as of last Friday, compared to 4.4% last year and a 5-year average of 6.4%. This suggests that Brazil's February soybean exports could be substantial.
Brazil's forward CNF (Cost and Freight) offers have declined in the past few weeks, leading to a significant widening of the price advantage compared to the United States. Consequently, US cumulative soybean net sales have remained weak for the past four consecutive weeks.
In Argentina, high temperatures and limited rainfall are expected to impact most areas. However, BAGE (Buenos Aires Grain Exchange) increased its Argentine production estimate by 0.5 million tons to 52.5 million tons, considering past weather and crop conditions. Monitoring future weather conditions remains crucial.
In the domestic China market, although there are doubts about further downward movement of Soybean Futures, there are currently few bullish factors. Crush increased to almost 2 million tons last week.
Despite feed companies building stocks before the Spring Festival, spot basis was hardly supported as soymeal stocks remained at a high level. For the week ending 19th January, soymeal stocks increased by 19.2 thousand to 968.1 thousand tons, and it is unlikely that the situation will change in the short term.
Soybean Oil Supply and Demand
As of 21st January, the current soybean harvest rate in Brazil is 4.7%, compared to 2% in the same period last year. The overall harvest progress is too fast, which may cause Brazilian soybeans to complete the harvest and enter the market ahead of schedule, impacting soybean yield and influencing the entire oil and oilseed market.
Regarding pressing, as of 19th January, the profit from American bean pressing was $2.33 per bushel, the lowest level since June 30, 2023.
As of 26th January, the soybean extraction profits for Brazil and Argentina were $97.4/ton and $77/ton, respectively, a decrease from last week's high.
In terms of exports, the net sales volume of US soybeans was 560,869 tons as of 19th January. This is a decrease of 28.21% MoM but significantly higher than the previous two weeks.
As Brazilian soybeans are gradually harvested and listed, the export share of American soybeans will be squeezed, potentially affecting the price of soybean oil. However, attention still needs to be paid to the impact of profit and demand for biodiesel on soybean oil prices in the future.
According to Mysteel's statistics, China's soybean crushing volume was 1.9973 million tons in mid-January, with an operating rate of 57%. This was slightly higher than estimated.
It is expected that the operating rate of domestic oil plants will slightly decrease this week, with an estimated soybean crushing capacity of 1.8379 million tons and an operating rate of 53%.
Soybean oil transactions were good in the week of 22nd January, mainly due to the current price difference between soybean and palm oil, which has improved the cost-effectiveness of soybean oil. Coupled with stocking before the Spring Festival, it has boosted domestic demand.
As of 19th January, soybean oil inventory was 929,500 tons, marking the second consecutive week of decline.
Soybean Futures Price
In the week of 22nd January, Soybean Futures CBOT Soybeans experienced initial gains followed by a decline, fluctuating generally above $12 per bushel.
In the domestic China market, falling Brazilian CNF offers have resulted in a sharper decline in soybean import costs compared to CBOT soybean futures. This explains the weakness in DCE soymeal futures, which even fell below 3000 RMB per ton on 26th January.
According to Barchart, DCE Soybean No. 1 Futures is priced at 4,666 RMB/Ton, as of 30th Jan 2024. Click to find out the latest price on DCE Soybean Futures.
Soybean Oil Futures Price
Internationally, CBOT Soybean oil Futures maintained a volatile trend in Mid-January.
In the domestic China market, Soybean oil prices maintained a volatile trend, but were relatively weak compared to palm oil.
The subsequent trend of soybean oil prices still needs to pay attention to the extent of palm oil production reduction. If the palm oil production reduction is significant and the driving force is strong, soybean oil may follow palm oil to rise, and the price difference between soybean and palm oil may continue to shrink.
If the weather hype and production reduction hype for palm oil are not as expected, coupled with the weakening of palm oil affected by El Niño production reduction and the approaching market of South American soybeans, soybean oil may operate weakly and wait for the driver to appear before entering the market for expansion.
According to Barchart, DCE Soybean Oil Futures is priced at 7,486 RMB, as of 30th Jan 2024. Click to find out the latest price on DCE Soybean Oil Futures.
Soybean Meal Futures Price
According to Barchart, DCE Soybean Meal Futures is priced at 2,955 RMB, as of 30th Jan 2024. Click to find out the latest price on DCE Soybean Meal Futures.
Start Trading With Orient Futures Singapore
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.
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