Futures feature:
sunshine for soybeans

Soybean futures have started to attract interest from bargain hunters looking to go long of a market trading at historically low levels. Talk of physical buying interest from China has thus far proved unfounded, but in this market people are willing to buy on the back of rumours.

Although this news has failed to lift the market, as all gains have been capped by selling due to favourable weather conditions in South America. Longer term, estimates put demand for the 2001/2 crop year at a record 1 billion bushels. Along with research, which suggests that grain oil prices (sunflower, soy et cetera) will have a bumper year next year, with prices going up by around 22%. This should help lift the soy complex. Also a weakening US dollar will not do any harm to upside potential, making exports to other countries more forthcoming.

All in all, I'd say that soybeans represent a good long-term buying opportunity, which should be approached using an instrument that offers limited liability. March soybean futures are based on a contract size of 5000 bushels and are quoted in US cents per bushel. A typical move on soybean futures from 4.50-4.60 would realise a profit/loss of $500.