What are Soybean Futures?
Soybean futures are an exchange-traded futures contract where the buyers agree to receive a set amount of soybeans at an agreed price on a specific date in the future. They are traded on the Chicago Board of Trade and are used to provide traders with exceptional liquidity and hedging possibilities.
If you would like to know more about Soybean Futures, here are 6 Things You Need to Know About Soybean Futures Trading
How to Trade Soybean Futures
Soybeans and their futures contracts play vital roles across the world. They're used in various products like animal feed, meat substitutes, and soybean oil. With rising global demand, soybean futures prices are also increasing. Consequently, these contracts are gaining popularity due to their high liquidity, making them a favored option for day trading.
Soybean Futures Annual Cycle
Soybean futures typically adhere to a predictable annual cycle of planting, podding, and harvesting.
Planting, which typically occurs between March and May, is a crucial factor influencing soybean futures. The USDA's annual planting-expectations report sets the tone, with actual planting numbers often affecting futures prices. Meeting the anticipated planting figures typically drives soybean futures prices upward, while lower-than-expected numbers may exert downward pressure on prices.
Podding, when soybean seeds begin to sprout around August, provides a more accurate estimate of the final crop. Strong or weak podding numbers directly impact futures prices.
Harvest, usually in October or November, also plays a significant role. Factors like delays, diseased crops, and yields affect futures prices based on the quantity harvested.
To grasp the dynamics of soybean futures, monitoring various reports throughout the year is essential. Reports such as Grain Stocks Reports, USDA Reports, and WASDE Reports offer insights into soybean futures quotes and forecasts, aiding in understanding market conditions.
Other Key Factors Affecting Soybean Prices
Soybean prices can be influenced by various other fundamental forces, which traders should consider closely:
US Dollar: Like many other commodities, soybean prices are primarily quoted in US dollars. When the dollar strengthens, soybean prices typically decrease, and vice versa.
Emerging Market Demand: Besides China, emerging markets such as India and South Africa are increasingly importing soybeans. This rising demand from these countries can drive prices upward.
Ethanol Subsidies: In the US, the IRS provides ethanol subsidies benefiting corn farmers. If these subsidies were to end, farmers might shift towards soybean cultivation, potentially leading to lower soybean prices.
Soybean Futures Contract Specs
Soybean Futures contracts has the following specifications:
Minimum price fluctuation of ¼ of one cent (0.0025) per bushel which is = $12.50.
The last delivery date of the good is on the second business day following the last trading day of the delivery month.
Contract months are for 15 monthly contracts of January, March, May, August, September and 8-monthly contracts of July and November listed annually after the termination of trading in the November contract of the current year.
Trading Hours for CME Globex are from Mondays to Fridays, at these trading hours:
8:30 am – 1:20 pm CT
Or Sunday to Friday:
7:00 pm – 7:45 am CT
Soybean Futures Contracts Code,
CME Globex: ZS
CME Clearport: S
Clearing: S
TAS: SBT
Contact Unit: 5,000 bushels
How Can I Trade Soybean Futures?
At Orient Futures, we provide traders and hedgers with access to the world’s major futures exchanges. These include access to soybeans, soybean oil and soybean meal futures.
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, opening additional trading avenues.
Expect streamlined processes and an easy-to-use interface designed for minimal latency, accompanied by our team's round-the-clock availability on trading days to provide assistance for all your trading needs.
