Soybeans
Soybeans are crushed into meal for feed and oil for food and biofuels. Learn soybean futures, Brazil vs US supply, China's demand, the crush and key price drivers.
Soybeans are the world's most important oilseed. When crushed, a bushel of soybeans produces soybean meal, a high protein animal feed, and soybean oil, used in cooking, food products and increasingly biofuels. Brazil and the United States produce most of the world's soybeans, and China is by far the largest importer, buying about 60% of globally traded soybeans to feed its huge pig and poultry industries. That makes soybean prices sensitive to South American weather, Chinese demand and trade politics.
The soybean complex#
| Contract | Symbol | Size | Quote |
|---|---|---|---|
| Soybeans | ZS | 5,000 bushels | Cents per bushel; 1/4 cent tick = $12.50 |
| Soybean meal | ZM | 100 short tons | Dollars per short ton |
| Soybean oil | ZL | 60,000 pounds | Cents per pound |
The difference between the value of meal and oil and the cost of beans is the crush margin. See Crush Spreads.
Supply: US and Brazil#
| Country | Planting | Harvest | Notes |
|---|---|---|---|
| United States | May to June | September to November | Midwest; exports peak in autumn |
| Brazil | September to December | January to April | The largest producer and exporter |
| Argentina | November to January | March to June | Leading exporter of meal and oil |
Brazil overtook the US as the largest producer and exporter in the late 2010s, so its weather and harvest now strongly influence global prices. The Brazilian real also matters: a weaker real encourages Brazilian farmers to sell, adding supply. See Currency Pairs: Majors, Minors and Exotics.
China and trade policy#
What moves soybean prices#
| Driver | Effect |
|---|---|
| South American weather | Drought in Brazil or Argentina tightens supply |
| US weather (July to August) | Pod setting and filling are key |
| Chinese demand | Hog herd size, feed demand, state purchases |
| Trade policy | Tariffs and purchase agreements |
| Biofuel policy | Renewable diesel demand lifts soybean oil |
| Meal demand | Livestock feeding worldwide |
| Currency moves | The Brazilian real and US dollar |
| Planted acres | Competition with corn for land. See Corn |
Oil vs meal#
In recent years, US renewable diesel capacity expanded rapidly, boosting demand for soybean oil and raising its share of crush value. At the same time, more crushing for oil produced more meal, which pushed meal prices lower relative to oil. Traders follow these shifts through the oil share of the crush. See Crush Spreads.
Seasonality#
US soybean prices often carry weather premiums during July and August, then face harvest pressure in autumn. Brazilian harvests from February to April add supply in the Northern Hemisphere spring. See Seasonality in Commodities.
Trading soybeans#
- Outright futures and options.
- Crush spreads: beans against meal and oil.
- Soybean to corn ratio for acreage battles.
- Calendar spreads: July versus November (old crop versus new crop). See Calendar Spreads in Futures.
Risks#
- Weather in two hemispheres.
- Political and trade shocks.
- Disease in livestock affecting meal demand, such as African swine fever in China in 2018 to 2019.
Frequently asked questions#
What are soybeans used for?#
They are crushed into soybean meal for animal feed and soybean oil for food and biofuels, and also used directly in foods.
Who buys the most soybeans?#
China, which imports about 60% of globally traded soybeans, mainly for animal feed.
What moves soybean prices?#
Weather in the US and South America, Chinese demand, trade policy, biofuel demand for soybean oil and currency moves.
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- WheatCommodities
- Weather and Agricultural DataData and Alternative Data