Commodity Investing: Maximizing Returns through Fundamental Analysis

CHAPTER 10

Soybeans

Soybeans date back nearly 5,000 years; they were first created in China where they were considered the most important cultivated legume. The Chinese called them dadou, literally meaning great bean. In Mandarin this is still the term used today. Soybeans are part of the oilseed family of legumes. This is unlike dry peas, lentils, kidney beans, and other food legumes, which are pulses. The Food and Agricultural Organization (FAO) of the United Nations uses the term pulses to describe legume crops that are harvested solely for the dry grain. Oilseeds are crops that are grown mainly for their vegetable oil and protein meal content. Other oilseeds crops include canola (rapeseed), cottonseed, sunflower, and peanuts. Within the oilseeds complex, soybeans are the most important in terms of world production and trade.

The climate, soil, and topography in the Midwest and in the southeastern parts of the United States are ideal for soybean production. This has allowed it to become the world's largest soybean producer and exporter. This is quite an achievement when you realize that soybeans are a relatively new crop in the United States compared with corn and wheat. It was during the 1920s that soybeans became a crop of major importance in the United States. Originally, soybeans were first planted in the United States as a high-protein forage crop for livestock and for its nitrogen-fixing qualities. Nitrogen-fixing crops put nitrogen back into the soil, which enriches it ...