Soybean Jan '23 (ZSF23)
|Tick Size||1/4 cent per bushel ($12.50 per contract)|
|Daily Limit||100 cents per bushel ($5,000 per contract) Expanded limit $1.50|
|Contract Size||5,000 bushels|
|Months||Jan, Mar, May, Jul, Aug, Sep, Nov (F, H, K, N, Q, U, X)|
|Trading Hours||7:00p.m. - 7:45a.m. and 8:30a.m. - 1:20p.m. (Settles 1:15p.m.) (Sun-Fri) CST|
|Value of One Futures Unit||$50|
|Value of One Options Unit||$50|
|Last Trading Day||The business day prior to the 15th calendar day of the contract month|
Soybean is the common name for the annual leguminous plant and its seed. The soybean is a member of the oilseed family and is not considered a grain. The soybean seeds are contained in pods, and are nearly spherical. The seeds are usually light yellow. The seeds contain 20% oil and 40% protein. Soybeans were an ancient food crop in China, Japan, and Korea and were only introduced to the U.S. in the early 1800s. Today, soybeans are the second-largest crop produced in the U.S. behind corn. Soybean production in the U.S. is concentrated in the Midwest and the lower Mississippi Valley. Soybean crops in the U.S. are planted in May or June and are harvested in autumn. Soybean plants usually reach maturity 100-150 days after planting, depending on growing conditions.
Soybeans are used to produce a wide variety of food products. The key value of soybeans lies in the relatively high protein content, which makes it an excellent source of protein without many of the negative factors of animal meat. Popular soy-based food products include whole soybeans (roasted for snacks or used in sauces, stews and soups), soy oil for cooking and baking, soy flour, protein concentrates, isolated soy protein (which contains up to 92% protein), soy milk and baby formula (as an alternative to dairy products), soy yogurt, soy cheese, soy nut butter, soy sprouts, tofu and tofu products (soybean curd), soy sauce (which is produced by a fermentation process), and meat alternatives (hamburgers, breakfast sausage, etc.).
The primary market for soybean futures is at the CME Group. The CME's soybean contract calls for the delivery of 5,000 bushels of No. 2 yellow soybeans (at contract par), No. 1 yellow soybeans (at 6 cents per bushel above the contract price), or No. 3 yellow soybeans (at 6 cents under the contract price). Soybean futures are also traded at exchanges in Brazil, Argentina, China, and Tokyo.
Prices - CME soybean futures prices (Barchart.com electronic symbol ZS) rallied into Q2-2021 and posted a 9-1/4 year high of $16.77 per bushel in May. Soybean prices soared as demand recovered after the global economy reopened from the pandemic. Soybean oil demand surged on the increased usage of cooking oils as restaurants reopened. Also, Chinese demand for soymeal exploded as it needed to feed its expanding hog herd that was devasted by the African swine virus. The outlook for smaller U.S. soybean production also boosted prices after the USDA in the May WASDE report projected U.S. 2021/22 soybean production of 4.405 billion bushels, below market expectations of 4.431 billion bushels. The rally in soybeans faltered as prices trended lower into November when they posted a 1-year low of $11.71 per bushel. Improved U.S. weather prospects in the summer eased dry spring conditions and bolstered the outlook for the U.S. soybean crop, which weighed on prices. Also, the USDA, in the July WASDE report, unexpectedly boosted its 2021/22 global soybean ending stocks estimate to 94.5 million metric tons from 92.6 million metric tons on reduced soybean demand from China. The outlook for a bumper global soybean crop undercut prices after the USDA in the Oct WASDE report raised its U.S. 2021/22 soybean production estimate to a record 4.435 billion bushels and raised its global 2021/22 soybean production estimate to a record 372.56 million metric tons. The USDA also raised its global soybean ending stocks estimate to 104.6 million metric tons from 98.9 million metric tons in September. Increased supplies from Brazil also pressured soybean prices after Conab projected Brazil 2022 soybean exports would climb +5.7% yr/yr to a record 90.7 million metric tons. Soybean prices recovered slightly into year-end after the USDA, in the December WASDE report, unexpectedly cut its U.S and global 2021/22 soybean ending stock estimates. Also, short-covering emerged in soybeans after extreme dry conditions threatened soybean crops in Brazil, the world's largest soybean grower and exporter. Soybean prices finished 2021 little changed, up by +1.1% yr/yr at $13.29 per bushel.
Supply - World soybean production during the 2021/22 marketing year (Sep-Aug) is expected to rise +1.7% yr/yr to a record 372.563 million metric tons. World soybean production has risen sharply from only 80 million metric tons back in the 1980s. The world's largest soybean producers in 2021/22 are expected to be Brazil with 37.3% of world production, the U.S. with 32.4%, Argentina with 12.5%, China with 4.4%, and India with 3.2%. Brazil's production has risen by almost eight-fold since 1980. China's soybean production has roughly doubled since 1980.
U.S. soybean production in 2021/22 is expected to rise by +5.2% yr/yr to 4.435 billion bushels, a new record high. U.S. farmers are expected to harvest 86,332 million acres of soybeans in 2021/22, up by +4.5% yr/yr but still below the 2017/18 record high of 89.542 billion bushels. The average yield in 2021/22 is expected to rise +0.8% yr/yr to 51.4 bushels per acre, but remain below the 2016/17 record high of 51.9 bushels per acre. U.S. ending stocks for the 2021/22 marketing year are expected to rise by +36.2% yr/yr to 350.0 million bushels.
Demand - Total U.S. soybean distribution in 2021/22 is expected to fall by -3.3% yr/yr to 4.357 billion bushels. The distribution tables for U.S. soybeans for the 2021/22 marketing year show that 50.3% of U.S. soybean usage will go for crushed oil and meal products, 47.1% for exports, and 2.7% for seed, feed, and residual. The quantity of U.S. soybeans that will go for crushing is expected to rise +2.3% yr/yr in 2021/22 to 2.190 billion bushels. The world soybean crush in 2021/22 is expected to rise +3.2% yr/yr to a new record high of 325.721 million metric tons, which is about triple the level seen in 1993/94.
Trade - World exports of soybeans in 2021/22 are expected to rise +3.7% to a new record high of 170.740 million metric tons. The world's largest soybean exporters in 2021/22 are expected to be Brazil with 55.1% of world exports, the U.S. with 32.7%, Paraguay with 3.1%, Argentina with 2.8%, and Canada with 2.5%. Brazil's soybean exports have more than doubled in the past decade, and Canada's exports have almost tripled. U.S. soybean exports in 2021/22 are expected to rise by +50% yr/yr to 3.428 billion bushels.
World soybean imports in 2021/22 are expected to rise +1.7% yr/yr to 168.426 million metric tons, which would be a new record high. The world's largest importers of soybeans in 2021/22 are expected to be China with 59.4% of world imports, the European Union with 8.8%, Mexico with 3.7%, and Egypt with 2.7%. China's imports in 2021/22 are expected to rise +0.2% yr/yr to 100.000 million metric tons.
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