Soybean Nov '19 (ZSX19)
|Tick Size||1/4 cent per bushel ($12.50 per contract)|
|Daily Limit||65 cents per bushel ($2,750 per contract) Expanded limit $1.15|
|Contract Size||5,000 bushels|
|Trading 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 in shape. The seeds are usually light yellow in color. 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) pushed higher in Q1-2018 and posted a 2-year high in March of $10.71 a bushel. Stellar Chinese demand for U.S. soybeans along with drought concerns in Argentina lifted soybean prices in Q1. China 2017 soybean imports rose +13.9% yr/yr to a record 95.54 MMT, while a La Nina weather system in the eastern Pacific Ocean curbed precipitation in Argentina, the world's third-biggest soybean producer. Also, the USDA's Prospective Plantings report in March gave soybean prices a lift after the USDA forecast that U.S. 2018 soybean acreage would decline by -1.2 million acres yr/yr to 88.982 million acres. Soybean prices then fell sharply in the spring on increased trade tensions between China and the U.S. that prompted China to boost its soybean purchases from Brazil at the expense of U.S. supplies. China May soybean imports from Brazil, now China's number one soybean supplier, jumped +17% yr/yr to 12.4 MMT, the most ever for the month of May. Another bearish factor for soybeans was the outlook for a record global crop and robust supplies as the USDA in July projected a record 2018/19 soybean crop of 359.49 MMT and that global 2018/19 soybean ending stocks would climb by +2.3% yr/yr to a record 98.27 MMT. This confluence of bearish factors caused soybean prices to sink to a 10-year low of $8.105 a bushel in July. Soybean prices recovered slightly in Q4 after the U.S. announced a new trade deal with Mexico and Canada, which sparked some short covering. However, the slump in Chinese demand for U.S. soybeans undercut by soybean prices as China's 2018 soybean imports from the U.S. plunged by -49% yr/yr to 16.64 MMT. China boosted its 2018 soybean imports from Brazil by 30% yr/yr to 66.1 MMT as shipments from Brazil accounted for 75% of China's total soybean imports in 2018. Soybean prices finished 2018 down -7.3% yr/yr at $8.825 a bushel.
Supply - World soybean production during the 2018/19 marketing year (Sep-Aug) is forecasted to rise +8.8% yr/yr to 369.203 million metric tons. World soybean production has risen sharply from the 80 million metric ton level seen back in the 1980's. The world's largest soybean producers in 2018/19 are expected to be the U.S. with 33.9% of world production, Brazil with 33.0%, Argentina with 15.0%, China with 4.3%, and India with 3.0%. China's soybean production has roughly doubled since 1980. Brazil's production has risen by almost eight times since 1980.
U.S. soybean production in 2018/19 is forecasted to rise by 4.3% yr/yr to 4.599 billion bushels, a new record high. U.S. farmers are expected to harvest 88.343 million acres of soybeans in 2018/19, falling by -1.3% yr/yr, down from last year's record high. The average yield in 2018/19 is forecasted to be up +5.7% yr/yr to 52.1, which is a new record high. U.S. ending stocks for the 2018/19 marketing year is expected to rise by +45.3% yr/yr to 438.1 million bushels.
Demand - Total U.S. distribution in 2018/19 fell -4.4% yr/yr to 4.108 billion bushels. the distribution tables for U.S. soybeans for the 2018/19 marketing year are expected to show that 50.6% of U.S. soybean usage went for crush, exports, 46,3% went for exports, and 3.1% for seed, feed, and residual. The quantity of U.S. soybeans that will go for crushing is expected to rise +1.2% yr/yr in 2018/19 to 2.080 billion bushels. The world soybean crush in 2018/19 is expected to rise +4.4% yr/yr to a new record high of 308.189 million metric tons, a new record high and which is about triple the level seen in 1993-94.
Trade - World exports of soybeans in 2018/19 are forecasted to rise +1.9% yr/yr to a new record high of 156.094 million metric tons. The world's largest soybean exporters in 2018/19 are expected to be Brazil with 51.9% of world exports, the U.S. with 33.1%. and Paraguay with 3.7%, Canada with 3.4%, and Argentina with 3.2%. Brazil's soybean exports have more than doubled in the past decade and Canada's exports have almost tripled. U.S. soybean exports in 2018/19 are forecasted to fall by -8.8% yr/yr to 1.945 billion bushels.
World imports in 2018/19 are expected to fall -0.7% yr/yr to 152.460 million metric tons. The world's largest importers of soybeans in 2018/19 are expected to be China with 59.0% of world imports, the European Union with 10.4%, Mexico with 3.3%, and Japan with 2.2%. China's imports in 2018/19 are expected to fall -4.4% yr/yr to 90.000 million metric tons, which is down from last year's record level.
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