Soybeans are an edible legume that are consumed in various forms around the world. There are three different soybean products that can be traded as a commodity, including soybean oil. It's easy to diversify your agricultural commodity portfolio with Tradu.
Our soybean commodity price chart below gives you the real-time live value, helping you spot opportunities. Start trading today or continue reading to learn more about the soybean trade, where it's produced, and how to trade soybeans in their various forms.
Soybeans are an edible and versatile legume that are consumed worldwide in a variety of products. Originally from East Asia, soybeans are now grown and harvested in a number of other countries, with the US and Brazil the leading producers of soybeans.
There are over 2,500 varieties of soybeans, used for a range of different products such as food, animal feed, and materials. Edamame is also a type of soybean that is harvested before other types when the colour is still green. Some common uses of soybeans include:
Three different types of soybean commodity products can be traded. These are soybeans, soymeal, and soybean oil:
Soybean commodity trading takes place on exchanges with the Chicago Mercantile Exchange (CME) being the most well-known. Other exchanges that facilitate the soybean trade are the Tokyo Grain Exchange (TGE), the Brazilian Mercantile and Futures Exchange (BM&F), the National Commodity and Derivatives Exchange (NCDEX), Mercado a Termino de Buenos Aires (MATba), Kansai Commodities Exchange (KANEX), and the Dalian Commodity Exchange (DCE).
Traders choose to invest in the soybean commodity market due to the increasingly high demand for the product. This means that the product offers high liquidity, allowing for plenty of trading opportunities, while spreads are generally fairly low.
Soybean trading also offers a way to hedge against inflation, especially when the US dollar is weak, and allows for portfolio diversification for those who may have most of their investments in other assets.
The majority of soybean commodity trading is carried out by speculating on the price of the market via the following methods. Please note you cannot trade spots, futures or options with Tradu; their inclusion here is for informational purposes only.
Trading soybean on the spot means at the current value. Traditionally, trading on the spot meant taking actual physical delivery of the product but this method can also be used to speculate on the future price.
Futures are commonly used across all soybean products including soybean oil trading. These are contracts to buy or sell a certain amount of soybean at a set price on a set date. Futures can require the actual transfer of the physical soybean product but, as with many trades, they more commonly involve a cash settlement.
With this method of trading, there is an obligation for both the buyer and seller to conduct the trade, although a position can be carried over to the next expiry date.
Soybean commodity trading via futures can take place in the months of January, March, May, July, August, September, and November, with the 15th of the month being the expiry date.
Contracts for difference (CFDs) is a method of trading that can be used to speculate on the market price of the soybean commodity. You can choose to either buy or sell a CFD, depending on whether you think the price will rise or fall.
CFDs are based on points per movement and any potential profit or loss will be in relation to the predicted and the actual direction of value movement.
Discover more in our guide to CFDs.
Trading with CFDs allows you to use leverage. This means that you can open a position with a small fraction of the trade value but still gain exposure to larger opportunities. While using leverage to trade soybean products can increase your potential profit, be aware that it can also magnify losses should the trade not go in your favour.
On the CME, which includes the Chicago Mercantile Exchange, soybean commodity trading can take place between 19:00 – 07:45 CT, Sunday through to Friday, and 08:30 – 13:20 CT, Monday to Friday, with the settlement time at 13:15.
There are multiple factors that can affect the price of the soybean commodity:
Soybean trading is an attractive option for those looking to gain exposure to the agricultural commodity market for a variety of reasons:
As with all types of trading, there are potential disadvantages when trading the soybean commodity market.
Any successful trader should, regardless of the market, weigh up the potential benefits and risks before beginning to trade the soybean commodity market.
Ready to start trading this popular agricultural commodity?
Discover more with our commodities resources: