What are Soybean Futures?
Soybean is an attractive commodity for hedging against inflation and with emerging markets driving soybean demand, its futures have proved to be extremely lucrative for traders.
Soybean has gained popularity due to its importance as livestock feed, meat substitute and oil source. With increasing populations and rising need for food around the world, the prices of soybeans are set to rise higher. It doesn’t hurt that soybean futures are extremely liquid and can experience frequent price fluctuations—giving traders plenty of opportunities to generate profits.
Technically, soybean futures help producers and marketers manage the risk of price fluctuations in the soybean market. A Soybean future is a standardized contract that is traded on an exchange between two parties. The buyer of the contract agrees to accept delivery of a specified quantity of soybean at a predetermined price at a future specified date. The seller agrees to supply such a quantity as per the contract.