Frequently Asked Questions

• 1.  

  What is soybean trading?

  Well, soybeans commodity trading refers to buying and selling soybeans contracts in the financial market through soybeans trading platforms. Typically, soybeans are traded through futures, options and spot trading.

  Some might wonder about the reasons that encourage investors to add soybeans to their portfolio. Soybean is one of the most widely grown crops. This commodity is used in food, animal feed, and biofuel production, so it is in high demand. Additionally:

  Soybeans are actually one of the most actively traded commodities through Chicago Board of Trade (CBOT).

  Soybean prices react to weather changes, export data, and global trade policies. These price swings create plenty of short-term and long-term trading opportunities.

  Soybeans can be traded through futures, CFDs, or ETFs offering different options that suit different strategies and different risk appetites.

  Because soybeans are highly demanded, they tend to hold value even in economic downturns. For that reason, some investors add them to their portfolio as a hedge against inflation.

  With growing interest in biofuels, soybeans are playing a bigger role in the energy sector.

  2.  

  What are soybean futures?

  In brief, soybean futures are standardized contracts traded on commodity exchanges that allow traders to buy or sell soybeans at a predetermined price on a specific future date.

  These contracts are primarily traded on the Chicago Board of Trade (CBOT), part of the CME Group.

  Here are more details about the mechanism that soybean futures follow

  • Contract Size: Each soybean futures contract represents 5,000 bushels of soybeans.
  • Pricing: Soybean futures are priced in cents per bushel, so if the price is 1,200 cents, that means soybeans are trading at $12 per bushel.
  • Regular Trading Hours:
    Monday – Friday: 4:45 AM – 12:55 PM Eastern Time (ET) (9:45 AM – 5:55 PM London Time)
  • Settlement: These contracts can be physically delivered, where actual soybeans change hands, or cash-settled, where traders close their positions before expiration to avoid delivery.
  • Tick Size: The smallest price movement for soybean futures is ¼ cent per bushel, which equals $12.50 per contract.
  • Expiration Months: Soybean futures contracts expire in January, March, May, July, August, September, and November, with the most active trading months being March, May, July, and November.
• 3.  

  What are the trading hours for soybean futures?

  Soybean futures trading hours vary according to the exchange and the type of session.

  Below you can find a list for soybean trading hours:

  • Electronic Trading (CME Globex):
    Soybean futures can be traded electronically on the CME Globex platform from 8:00 p.m. to 1:20 p.m. (Eastern Time), Sunday to Friday.
  • Pre-session Trading
    Before the hours that are mentioned above for electronic trading, soybeans futures can be traded at 7:45 p.m. (ET), Sunday to Friday. During this time, investors can adjust their trades only, as the actual buying and selling is not happening yet.
  • Halt
    Every weekday, there is a break in trading from 1:20 p.m. to 8:00 p.m. (ET). During this time, traders can only have an overview of the market, and prepare for the upcoming sessions.
  4.  

  What are soybean oil futures?.

  In addition to trading soybeans, investors can venture into soybean oil trading through soybean oil futures. The first focuses on the whole raw soybeans, while the other focuses on the oil extracted from soybeans.

  Widely used around the globe, oil soybeans can also offer a lot of opportunities.

  As for soybeans oil futures, those are also standardized contracts traded on commodity exchanges. Investors can buy and sell soybeans oil at predetermined prices at a set date in the future through these contracts. Here are the details for these futures:

  Prices for soybean oil contracts are quoted in cents per pound (e.g., 50.00 cents per pound).

  Contracts can be physically delivered, meaning actual soybean oil is exchanged, or cash-settled.

  The smallest price movement is 0.01 cents per pound, which equals $6 per contract.

  Contracts are available in January, March, May, July, August, September, October, and December, with the most active months being March, May, July, and December.

• 5.  

  What are the trading hours for soybean oil futures?

  Just as it is the case with soybean futures, the soybean oil futures trading hours vary according to the exchange and the type of session.

  • Electronic Trading (CME Globex):
    Soybean oil futures are traded electronically from 8:00 p.m. to 1:20 p.m. (Eastern Time), Sunday to Friday.
  • Pre-session Trading
    Before the hours that are mentioned above for electronic trading, soybeans oil futures can be traded at 7:45 p.m. (ET), Sunday to Friday. During this time, investors can adjust their trades only, as the actual buying and selling is not happening yet.
  • Halt
    Every weekday, there is a break in trading from 1:20 p.m. to 8:00 p.m. (ET). During this time, traders can only have an overview of the market, and prepare for the upcoming sessions.
  6.  

  What factors influence soybean trading prices?

  • US Production
    Why US specifically? That is most probably the first question that occurred to you. Well, the US is the largest producer and exporter of soybeans. Hence, any disruption that happens in this area can affect the supply. Less supply can lead to higher prices.
  • The strength of the dollar
    Soybeans are priced in U.S. dollars. If the dollar becomes stronger, soybeans become more expensive for people buying the crop in different currencies. In the long run, the demand can be less, the prices might go down.
  • Emerging Market Demand
    Rapidly growing economies such as India and South Africa are importing increasing amounts of soybeans. If the demand continues to increase, while the supply stays stable, the prices might go higher.
  • Alternative Oils
    Other vegetable oils such as rapeseed, linseed, and cottonseed oil are considered competitors to soybean oil. If demand for these alternative oils increases, soybean oil may experience lower demand and weaker prices.
• 7.  

  How can I start trading soybeans?

  Soybeans trading is a venture that requires some preparation on the trader’s side.

  • The best thing to do when planning to start trading of any kind is first to understand what trading is, what the risks involved are as well as the possible returns.
  • Once done, you can shift your focus to studying the different markets that can be traded and familiarizing yourself with general trends.
  • Now, it is time to choose a broker. Compare the trading conditions that each broker offers, check their regulatory status, and review their online reviews. You should also verify whether they provide access to actual commodity trading (where you buy and sell physical commodities), futures contracts, or CFDs (which are derivative products that let you trade on price movements without owning the underlying asset). Understanding the differences between these products will help you select a broker that aligns with your trading strategy and risk tolerance.
  • Once you choose a reliable broker, open a demo account. Why risk your money directly if you can practice and adjust your strategy with virtual money?
  • If you feel confident enough in your skills, open a live account and get it verified. Place your first order and keep monitoring your trades.