Soybean Futures
Commodity markets where raw or primary products are exchanged are
traded on regulated commodities exchanges, in which they are bought
and sold in standardized contracts.
Chicago Board of
Trade Soybean Futures
History
The modern commodity markets have their roots in the trading of
agricultural products. While wheat and corn, cattle and pigs, were
widely traded using standard instruments in the 19th century in the
United States, other basic foodstuffs such as soybeans were only added
quite recently in most markets. For a commodity market to be
established, there must be very broad consensus on the variations in
the product that make it acceptable for one purpose or another.
The economic impact of the development of commodity markets is hard to
over-estimate. Through the 19th century "the exchanges became
effective spokesmen for, and innovators of, improvements in
transportation, warehousing, and financing, which paved the way to
expanded interstate and international trade."
Standardization
U.S. soybean futures, are of standard grade if they are "GMO or a
mixture of GMO and Non-GMO No. 2 yellow soybeans of Indiana, Ohio and
Michigan origin produced in the U.S.A. (Non-screened, stored in
silo)," and of deliverable grade if they are "GMO or a mixture of GMO
and Non-GMO No. 2 yellow soybeans of Iowa, Illinois and Wisconsin
origin produced in the U.S.A. (Non-screened, stored in silo)." Note
the distinction between states, and the need to clearly mention their
status as "GMO" ("Genetically Modified Organism") which makes them
unacceptable to most "organic" food buyers.
Similar specifications apply for cotton, orange juice, cocoa, sugar,
wheat, corn, barley, pork bellies, milk, feedstuffs, fruits,
vegetables, other grains, other beans, hay, other livestock, meats,
poultry, eggs, or any other commodity which is so traded.
The concept of an interchangeable deliverable or guaranteed delivery
is always to some degree a fiction. Trade in commodities is like trade
in any other physical product or service. No magic of the commodity
contract itself makes "units" of the product totally uniform nor gets
it to the delivery point safely and on time.
Supervising Commission
Data
