Soybean is one of the most widespread leguminous crops in the world. Its main producers are the USA, Brazil, China, Argentina, and India. China and the European Union are among the main importers. Soybean futures are traded on the largest commodity exchanges, including CME, TOCOM, NCDEX, and JSE.
Soybean quotes depend on several factors. Traders should monitor news about soybean acreage in importing countries, especially China. If Asia's largest economy increases its production, supply will exceed demand, and the SOYBEAN rate will decrease.
It is also important for traders to keep an eye on news about climate change and weather conditions. In case of natural disasters and severe bad weather from March to September (from the beginning of the sowing campaign to the beginning of harvesting), the quantity and quality of the new crop can be significantly reduced. In conditions of a shortage of supply, soybean quotes will grow.
Like other agricultural assets, soybean quotes are cyclical. Its rate drops in August as farmers sell off old crops before the harvest.
The Chicago Mercantile Exchange report can help traders determine the medium and long-term SOYBEAN trend. The document displays the supply/demand balance, stock volumes, export shipments, and acreage.
Traders should also consider factors that may affect the supply of soybeans. For example, due to the COVID-19 pandemic, the SOYBEAN price has increased significantly in 2020. Due to the uncertainty about the supply and harvest of the new crop, the demand in the market has increased.
Risk warning: Trading in FX and CFDs entails high risk of losing capital.
