Soybeans
From IntFX
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[edit] Overview
Soybeans are native to southeast Asia, but 45 percent of the world's soybean area, and 55 percent of production, is in the United States. The U.S. produced 75 million metric tons of soybeans in 2000, of which more than one-third was exported. Other leading producers are Brazil, Argentina, China, and India.
Environmental groups, such as Greenpeace and the WWF, have reported that both soybean cultivation and the threat to increase soybean cultivation in Brazil is destroying huge areas of Amazon rainforest and encouraging deforestation. American soil scientist, Dr. Andrew McClung, who first showed that the infertile Cerrado region of Brazil could grow soybeans, was awarded the 2006 World Food Prize on October 19, 2006.
[edit] Soybean Prices
Contract Specifications: Soybeans Futures
- Contract Size: 5,000 bushels
- Deliverable Grades: No. 2 Yellow at par, No. 1 yellow at 6 cents per bushel over contract price and No. 3 yellow at 6 cents per bushel under contract price No. 3 Yellow Soybeans are only deliverable when all factors equal U.S. No. 2 or better except foreign material. See Chapter 10s - Soybean Futures in the Rules & Regulations section.
- Tick Size: 1/4 cent/bu ($12.50/contract)
- Price Quote: Cents bushel
- Contract Months: Sep, Nov, Jan, Mar, May, Jul, Aug
- Last Trading Day: The business day prior to the 15th calendar day of the contract month.
- Last Delivery Day: Second business day following the last trading day of the delivery month.
- Trading Hours: Open Auction: 9:30 a.m. - 1:15 p.m. Central Time, Mon-Fri.Electronic: 6:31 p.m. - 6:00 a.m. and 9:30 a.m. - 1:15 p.m. Central Time, Sun.-Fri.Trading in expiring contracts closes at noon on the last trading day.
- Ticker Symbols: Open Auction: S Electronic: ZS
- Daily Price Limit: 50 cents/bu ($2,500/contract) above or below the previous day's settlement price. No limit in the spot month (limits are lifted beginning on First Position Day).[1]
[edit] Applications
1. Soybeans can be broadly classified as "vegetable" (garden) or field (oil) types. Vegetable types cook more easily, have a mild nutty flavor, better texture, are larger in size, higher in protein, and lower in oil than field types. Tofu and soymilk producers prefer the higher protein cultivars bred from vegetable soybeans originally brought to the United States in the late 1930s. The "garden" cultivars are generally not suitable for mechanical combine harvesting because they have a tendency for the pods to shatter on reaching maturity.
2. Among the legumes, the soybean, also classed as an oilseed, is pre-eminent for its high (38–45%) protein content as well as its high (20%) oil content. Soybeans are the leading agricultural export in the United States. The bulk of the soybean crop is grown for oil production, with the high-protein defatted and "toasted" soy meal used as livestock feed. A smaller percentage of soybeans are used directly for human consumption.
3. Soybeans may be boiled whole in their green pod and served with salt, under the Japanese name edamame. Soybeans prepared this way are a popular local snack in Hawaii, and are becoming increasingly popular in the continental United States. Because of the proclaimed health benefits of soy, edamame has been featured as an ideal snack alternative in fitness and healthy living magazines such as Real Simple. Edamame is sold in the frozen vegetable section at some larger grocery stores, and as ready-to-eat snackfood in many Asian delis.
4. In China, Japan, and Korea the bean and products made from the bean are a popular part of the diet. Japanese foods made from soya include: miso, natto, tofu and edamame. In Korean cuisine, soybean sprouts, called kongnamul (hangul are also used in a variety of dishes such as doenjang, cheonggukjang and ganjang, .
5. The beans can be processed in a variety of ways. Common forms of soy (or soya) include soy meal, soy flour, "soy milk", tofu, textured vegetable protein (TVP, which is made into a wide variety of vegetarian foods, some of them intended to imitate meat), tempeh, soy lecithin and soybean oil. Soybeans are also the primary ingredient involved in the production of soy sauce (or shoyu).
6. Soybeans grow throughout Asia and North and South America.Archer Daniels Midland (ADM) is among the largest processors of soybeans and soy products. ADM along with DOW, DuPont and Monsanto support the industry trade associations United Soybean Board (USB) and Soyfoods Association of North America (SANA). These trade associations have increased the consumption of soy products dramatically in recent years.
Oil
1. In processing soybeans for oil extraction and subsequent soy flour production, selection of high quality, sound, clean, dehulled yellow soybeans is very important. Soybeans having a dark colored seed coat, or even beans with a dark hilum will inadvertently leave dark specks in the flour, an undesirable factor when used in food products. All commercial soybeans in the United States are yellow or yellow brown.
2. To produce soybean oil, the soybeans are cracked, adjusted for moisture content, rolled into flakes and solvent-extracted with commercial hexane. The oil is then refined, blended for different applications, and sometimes hydrogenated. Soybean oils, both liquid and partially hydrogenated, are exported abroad, sold as "vegetable oil," or end up in a wide variety of processed foods. The remaining soybean husks are used mainly as animal feed.
3. The major unsaturated fatty acids in soybean oil triglycerides are 7% linolenic acid (C18:3); 51% linoleic acid (C-18:2); and 23% oleic acid(C-18:1). It also contains the saturated fatty acids 4%stearic acid and 10% palmitic acid.
4. Soybean oil has a relatively high proportion, 7–10%, of oxidation prone linolenic acid, which is an undesirable property for continuous service, such as in a restaurant. In the early nineties, Iowa State University developed soybean oil with 1% linolenic acid in the oil. Three companies, Monsanto, DuPont/Bunge, and Asoyia in 2004 introduced low linolenic, (C18:3; cis-9, cis-12, cis-15 octadecatrienoic acid) Roundup Ready soybeans. In the past hydrogenation reduced the unsaturation in linolenic acid but produced the unnatural trans fatty acid trans fat configuration whereas in nature the configuration is cis.
5. In the 2002–2003 growing season, 30.6 million metric tons of soybean oil were produced worldwide, constituting about half of worldwide edible vegetable oil production, and thirty percent of all fats and oils produced, including animal fats and oils derived from tropical plants.
Soybean oil has also been found effective as an insect repellent in some studies. The commercial product Bite Blocker contains soybean oil as one active ingredient.[2]
[edit] Supply/Demand
Production history
Soybean domestication first occurred in China. Ancient Chinese documents state that soybean agriculture began during the Zhou Dynasty in 664 BC. and was introduced to the Zhou heartland from the Manchuria Plain. Archaeologists recovered soybean from a site in Jilin Province and dated charcoal associated with the legume to cal. 900–520 BC.
However, the earliest known soybeans were unearthed from archaeological sites in Korea. For example, AMS radiocarbon dating on soybean recovered through flotation during excavations at the Early Mumun Period Okbang site in Korea clearly indicates that soybean was cultivated as a food crop in cal. 1000–900 BC.
Although the Korean peninsula is usually considered to be an area of secondary agricultural origins, similar research on Azuki bean indicates that, in addition to Northeast China, the Korean Peninsula was an early centre of importance related to the domestication and early cultivation of legumes. The best current evidence on the Japanese Archipelago suggests that soybean cultivation occurred in the early Yayoi period.[3]
Soybean Demand Continues to Drive Production
Projected U.S. soybean ending stocks for 2007/08 are reduced 15 million bushels to 160 million this month, down 72 percent from last year's record, and the lowest since 2003/04. Soybean exports are raised 10 million bushels to 1,005 million reflecting stronger-than-expected shipments and sales through January. Soybean crush is raised 5 million bushels to 1,835 million reflecting relatively good crush margins and an increase in projected soybean meal exports. Soybean oil production is increased due to an increase in the oil extraction rate and higher crush. Domestic soybean oil use is reduced mainly due to lower projected use for biodiesel. High soybean oil prices have reduced biodiesel production prospects despite relatively strong foreign demand. The soybean oil export projection is raised reflecting strong sales, especially to China and North Africa. Soybean oil stocks are also projected higher.
The U.S. season-average soybean price range is projected at $10.00 to $10.80 per bushel and is narrowed 10 cents on each end. The soybean meal price is projected at $305 to $335 per short ton, unchanged from last month. Soybean oil prices continue to strengthen. The soybean oil price is projected at 47.5 to 51.5 cents per pound, up 2 cents on both ends of the range.
Global oilseed production for 2007/08 is projected
at 390.3 million tons, up 0.6 million tons from last
month. Higher rapeseed, sunflowerseed, and
cottonseed production more than offset reduced
soybean production. Global soybean production is
reduced 0.3 million tons to 220.1 million tons.
Bolivia's soybean crop is reduced 0.3 million tons
reflecting excessive rains and flooding that have
reduced projected harvested area and yields.
Global rapeseed production is raised 0.2 million
tons to 48.5 million due to larger projected crops
for EU-27 and India. While harvested area is
projected higher for both, the area increase for
India is partly offset by lower yields. Global
sunflowerseed production is projected higher due
to increases for Argentina and Ukraine. Other
changes include higher cottonseed production for
China and Pakistan, and lower cottonseed
production for India. Malaysia palm oil production
is projected at a record 17 million tons, up 0.4
million tons from last month.[4]
[edit] Price forecast
Soybean production will increase 24% in the coming 10 years, with Brazil producing 34% world supply and 30% for the US. Brazil’s share of the export market grows from 38% to 51% in the coming decade, while the US share drops to 27%. China will soon overtake the US in soybean consumption. While China’s soybean production remains steady its processing capacity will double, driving by demand from its expanding livestock industry. [5]
The US Department of Agriculture (USDA) has left the soybean acreage forecast unchanged at 71 million for the 2008 crop season. The market awaits the official release of US government’s first official plantings report, which is based on more thorough data collected from farmers, expected on March 31st.
Export sales report issued by the US Agriculture Department early Friday showed that 630,600 tonnes of 2007/08 soybeans were sold for export last week, with nearly 40 percent for China. The government also confirmed a Chinese purchase of 110,000 tonnes of US soybeans. According to China's agriculture minister, bad winter storms had severely damaged 40 percent of the country's rapeseed crop, leading investors to bet the country will boost buying of soybeans to make up the shortfall.
[edit] Influencing Factors
- Tight supply position in the domestic and global markets
- Chinese demand for veg-oils
- Low global inventories
- Adverse weather conditions in the domestic as well as overseas markets
- Export demand for Soy meal
- Trend in CBOT and DCE soy complex[6]
[edit] China, India Consumption
Purchases of soybeans in China are growing as residents of the world’s most populous country eat more meat and consume more vegetable oil as incomes rise and diets change. Argentine farmers plan to plant more acres with the oilseed this year to benefit from higher prices. Demand for soybeans is also climbing in Africa and India. The higher prices “could last longer” than the rally in 2004 because demand is stronger now. Argentina is the world’s third largest soybean exporter behind the US and Brazil. The country is also the world’s largest exporter of soyoil. Argentina’s wheat output may fall this year because of a shortage of nitrogen used as a fertilizer in the South American nation, Grobocopatel said. The country was the world’s fourth largest wheat exporter last year.[7]
