When Is Soybean Season? A Commodity Investor's Guide to Trading Soy

Key Factors That Influence the Price of Soybeans Worldwide

A stripe of growing soybean plants in Mato Grosso, Brazil.
•••

Lucas Ninno/Getty Images

Soybean crops around the world have unique production cycles of planting, growing, and harvesting, all of which influence the price of the global crop. Grain prices tend to move the most during the growing season, as supply expectations can shift significantly depending on planted acreage, weather, and growing conditions. Crop disease and infestation can also play a role in the price volatility of soybeans each year. 

Below, you'll find the windows of opportunity for planting and harvesting soybean crops within the largest soybean-producing countries in the world.

World Production and Planting/Harvesting Seasons by Country

Considering how much of our food is imported, it might come as a surprise that the U.S. is the world's largest producer of soy. Here are the top soybean-producing countries in the world, in order of production, along with their planting and harvesting schedules. It's important to consider the weather and other agricultural conditions in these countries when timing swing trades or making long plays.

  • United States: Planting in late April through June, harvesting in late September through the end of November
  • Brazil: Planting in mid-August through mid-December, harvesting in February through May
  • Argentina: Planting in October through December, harvesting in April through early June
  • China: Planting in late April through mid-June, harvesting in September through early October

While soybeans are produced around the world, the most influential producer in the world of soybeans is the United States. Many factors can cause the price of soybeans to move, but the U.S. crop is the key determinate of the price path of this important grain.

Weather Effects

Since soybeans are an agricultural commodity, the weather determines the size and condition of the crop. Soybeans can be stored, but the shelf life of inventories is limited, as soybeans deteriorate and lose nutritional value over long periods.

In the United States, most soybean crops are grown in the Midwest and Delta regions. Typically, the southernmost areas begin planting first. The northern areas begin planting as the temperatures warm, the snow melts, and the soil thaws.

Demand

The crushing of raw soybeans is a process that turns the commodity into soybean meal and soybean oil. Soybean meal is required for animal feed. The soybean oil is a key ingredient in many common food products, and it's used for cooking around the world. When demand for soybean products increases, it directly correlates into demand for raw soybeans.

U.S. Dollar's Effect on Soy

When the dollar is strong, U.S. soybeans are more expensive than beans from other nations, which makes U.S. crops less competitive against nations with weaker currencies. There is an inverse price relationship between soybeans (as well as other commodities such as gold and oil) to the U.S. dollar.

The Supply Side of Soy

Farmers have a choice, in terms of the crops they plant on their acreage each year. U.S. farmers often choose between corn and soybeans. If corn is more expensive on a relative basis than soybeans, farmers tend to plant more corn. This often results in a smaller soybean crop, which is inherently bullish for the price of beans. When soybeans are more expensive, the converse tends to occur. The cycles are difficult to foresee, but soybean crops and corn crops are cyclical due to their competition.

Soybeans As a Commodity

When macro forces cause an overall strong market for agricultural commodity prices, this tends to translate into price strength. During bear market periods, the converse is often the case. Many factors are at play when it comes to the price direction of soybeans each year, and as planting season gets underway in the spring, the eventual soybean crop yield in the fall is the sum of all of these factors.

During the months that run from the spring to fall seasons each year, the price of soybeans can become volatile. Bumper crops are bearish, while shortfalls cause the price to rise. 

Soybean prices tend to be most volatile when uncertainty about the crop increases. In 2016, for example, a palm oil shortage caused by weather issues in Asia and a smaller than expected South American crop caused the price of nearby soybean futures to rally from under $9 per bushel to over $12 during the planting season in the U.S. A bumper crop brought the price back down to under $10 per bushel.

After that, in 2017, a surprise snowstorm at the end of April across many growing areas of the U.S. caused a brief rally. In these instances and others, weather plays a major role in price swings.

Seasonal changes are perhaps the most influential factor when it comes to soybeans. Trading by the season, rather than by the day or year, is often a good practice when investing in this exciting commodity.