Soybean is one of the highly traded agricultural commodities in the commodity exchanges across the globe. Soybeans are highly and profitably traded in commodity exchanges because of the reasons like: they are used for oil extraction and they are also very high protein diets. Soybeans are extensively used for the industrial purpose and a very small proportion is consumed directly by the human population on earth. The use of soybeans in the human lives is not new practice; the usage has a very long history. The history goes back to refer its popularity during the time of World War II. During II World War, soybeans became very popular and an important part of the militants’ life as they were used in both North America and Europe as protein foods and edible oil. During World War II itself, United States Department of Agriculture (USDA) also discovered that soybean can be used as a fertilizer. The top soybean exporters on the globe are Argentina, United States of America and Brazil whereas the top importers of the commodity are China, European Union, Japan and Mexico.

Earlier today, soybean ticked the highest price in its seven week price chart, the reason being the speculation of the weather conditions. Weather speculation suggested that the warm, dry weather that persists in Argentina now can bring down the production which, on the other hand, will boost the demand in the USA creating the surplus demand and that will ultimately increase the price of the commodity. Commodity Weather Group LLC said in the recent report that scanty rain can bring some hope to the farmers about the soybean production but the dry and warm weather that is expected to persist long after that looks like stressing the commodity almost by 40%. The weather forecast continuously supported the soybean prices and besides that exports also got stronger simultaneously because people chose to ship the commodity than buying them in lower prices from the South America.

But, six hours later, that price of soybean crashed down because the traders started assuming that the weather forecast in Argentina will boost other exporting countries’ production so as to balance the demand for the US supplies. The weather drastically started suggesting that there are chances that weather conditions may revive back and things may come to normal. Moreover, the soybean prices will remain supported as the demand of the commodity from China is also growing.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.