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Soybeans Futures Trading Basics
Soybeans futures are standardized, exchange-traded contracts in which the contract buyer agrees to take delivery, from the seller, a specific quantity of soybeans (eg. 5000 bushels) at a predetermined price on a future delivery date.
Soybeans Futures Exchanges
You can trade Soybeans futures at Chicago Board of Trade (CBOT) and Tokyo Grain Exchange (TGE).
CBOT Soybeans futures prices are quoted in dollars and cents per bushel and are traded in lot sizes of 5000 bushels (136 metric tons).
TGE Soybeans futures are traded in units of 50 tonnes and contract prices are quoted in yen per metric ton.
| Exchange & Product Name | Symbol | Contract Size | Initial Margin |
| CBOT Soybeans Futures (Price Quotes) | S | 5000 bushels (Full Contract Spec) | USD 4,725 (approx. 10%) (Latest Margin Info) |
| TGE Soybeans Futures (Price Quotes) | - | 50 tonnes (Full Contract Spec) | JPY 135,000 (approx. 7%) (Latest Margin Info) |
Soybeans Futures Trading
Consumers and producers of soybeans can manage soybeans price risk by purchasing and selling soybeans futures. Soybeans producers can employ a short hedge to lock in a selling price for the soybeans they produce while businesses that require soybeans can utilize a long hedge to secure a purchase price for the commodity they need.
Soybeans futures are also traded by speculators who assume the price risk that hedgers try to avoid in return for a chance to profit from favorable soybeans price movement. Speculators buy soybeans futures when they believe that soybeans prices will go up. Conversely, they will sell soybeans futures when they think that soybeans prices will fall.
Related Articles
- Buying Soybeans Futures to Profit from a Rise in Soybeans Prices
- Selling Soybeans Futures to Profit from a Fall in Soybeans Prices
- Soybeans Options Basics
- Soybeans Call Option Trading Basics
- Soybeans Put Option Trading Basics
- Hedging Against Rising Soybeans Prices with Soybeans Futures
- Hedging Against Falling Soybeans Prices with Soybeans Futures
How to Start Trading Soybeans Futures
To buy or sell soybeans futures, you need to open a trading account with a broker that handles futures trades. Most online brokerages out there only deal with stocks and stock options. Only a few such as optionsXpress lets you trade futures and futures options as well. optionsXpress also provide a virtual trading platform where beginners can try out futures and options trading in real market conditions without using real money.
