Soybeans fall into the grain market, a major global commodity market that includes other crops such as maize, rice and wheat.
Investors have options when it comes to trading soybeans. Usually traded as futures contracts, traders can choose to invest in soybeans, soybean oil or soybean meal.
Is it worth investing in soybeans today? Or should traders wait until the political and geographical climate settles?
History of Soybean Stocks
In the past year, the value of soybeans dropped dramatically, reaching a low in November, but has steadily increased since. Soybean futures recently hit a record high of $17.5 per bushel in late April, and have since settled to below $17.
Main producers and exporters of soybeans include the United States, Brazil, Argentina and Paraguay, making up 80% of production and 90% of total exports. With 60% of the imports, China is the largest importer of soybeans, followed by the European Union, Mexico, Japan and Taiwan.
Considering the above major players, various economic and political developments impact the price in a dramatic way. For example, the Ukraine war, drought in South America and the demand for biofuel has impacted the demand for all crops.
Current Quotation of Soybean Stocks
On April 29, 2022, the price of soybeans closed at $16.8945 per bushel.
Commodity markets are struggling against the U.S dollar’s inflation and high interest rates and the entire grain market is feeling the volatile repercussions. In addition, the geographical conditions of major exporters are not consistent.
For example, the U.S. Corn Belt is cold and wet, delaying the planting of corn crops. Instead, farmers are being pushed to plant soybeans which could impact the demand.
Soybeans, and commodities, are also losing value due to the commodity fund liquidation, which should be reassessed after the Fed announcement.
The Future of Soybean Stocks
The future of soybean futures are looking positive. New-crop soybean sales are up 64% from a year ago, suggesting that the demand will stay strong in 2023.
The price has recently peaked and started to drop again. While there will always be a demand for the commodity staple, the cost price is fairly high at the moment. Even so, experts predict that soybeans will trade at a higher rate in 12 months time, so buying at the current lower cost is an investment.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only