ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

Trading Soybean Futures

Updated on August 20, 2010

Trading Soybean Futures

I have always had this “trader’s fantasy” of trading soybean futures back in 2008 when “beans were in the teens” for the first time in over 20 years, but unfortunately, I completely missed that parabolic move, for reasons that are so stupid it’s ridiculous. I basically liquidated my commodity account in about 2005 so that I could fund a start-up business that basically went nowhere. It caused a very rough financial time for my family & I, and we are still somewhat in the process of recovery from that debacle. But I have never lost my passion for and love of the futures markets…I have been an off-and-on commodity trader since 2001 (more off than on, I guess), and trading is truly one of the most challenging and rewarding endeavors around. As far as trading soybeans goes, I have historically shied away from them in favor of the other grains such as corn, oats and wheat, and I think this is mainly due to the fact that beans usually have higher margins than their other grain counterparts. If you ever want to talk about a market that is notorious for intense volatility, soybean futures are the market for you. The beans are well-known for having extremely volatile moves typically during the summer months, and as I’m sure you are aware, any whispers of drought or lack of normal crop supplies, especially going into summer, can create parabolic moves to the upside. Limit moves in succession are not uncommon when things like this happen, and let me tell you, thousands of dollars can be made or lost in only hours in the soybean futures market.

Image courtesy of Google Images
Image courtesy of Google Images

Soybean Futures Trading

I have a friend who told me about one of his experiences with trading soybean futures. He and a buddy put some money together to buy a couple of soybean contracts, and then soybeans had a strong move up (I’m not sure if it was a limit move or not), and he and his buddy ended up making $25,000 in one trading day. Folks, this type of stuff is not uncommon. The sad part about it is that they got arrogant after that huge win, and ended up losing all of it back to the markets. True indeed is the saying that “the markets giveth, and the markets taketh away”. So dealing with soybean futures specifically, one contract represents 5,000 bushels of beans, making one whole uptick worth $50.00. What this means is if beans go from 750 to 751, you have just made fifty bucks (if you bought beans). Since soybeans are quoted in cents per bushel, the actual price looks more like this: 750.00, where the two places after the decimal represent quarter-moves in price. The smallest tick up (the “point”, as it’s called) is actually worth $12.50, as it is a quarter-of-a-cent per bushel price move. So then, if beans go from 750.00 to 750.25, that would equal a $12.50 move in price, and $12.50 in open profit added to your account balance—if you were long. Again, leverage is a two-edged sword, so you could just as easily lose this type of money if the price goes down when you’re long. I strongly encourage anyone who has the chutzpah to enter the arena of trading soybean futures to make sure that they can stomach the violent agitations in price that can happen in that market, especially when supply and demand fundamentals get all out of whack. Not trying to discourage anyone, just wanting to bring across a complete picture of not only the rewards of trading soybeans, but also the risks.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)