The global soybean market continues to change and evolve.
Factors such as long-term production patterns, shifting global trade flows, and geopolitical issues continue to impact soybean prices, production levels in various countries, and trade patterns. In the last few years, Brazil has become the world’s largest exporter of soybeans ‒ surpassing the United States for that title. Both markets have their own production and export dynamics, leaving market participants looking for ways to manage exposure to both regions.
Legacy US Chicago Board of Trade Soybean futures have been used to hedge global soybean positions for more than 80 years. As South America, particularly Brazil, has become a dominant soybean player, regional pricing alternatives have become increasingly important.
The new South American Soybean futures contract provides market participants a tool to directly manage exposure to the Brazilian soybean market.
Settling in US dollars to the Platts index, the financially settled contract will reflect Brazilian export prices at the Port of Santos, which will track the Brazilian soybean export price and simultaneously, the basis to US soybeans.
This offers market participants the ability to trade the spread between these key commodity regions.
South American Soybean futures can be traded on CME Globex or through block trades on Clearport ‒ Sunday through Friday, almost 24 hours per day. Margin offsets will be available for trading between the US and South American Soybean futures contracts.
Whether you are looking to offset basis risk or are interested in accessing Brazilian soybean market pricing, CME Group now offers a soybean futures contract to fit your needs.