Soybean prices fluctuate because of several factors, including type of byproduct produced from soybean processing, use of genetic modification, supply and demand among farmers and citizens in the United States, and production volume of competitors in international markets. As with other crops, soybean plants vary in price and production scale each year. While some farmers grow soybeans exclusively, others produce other crops for sale too: these farmers determine the amount of soybeans they can grow annually along with other crops; this volume fluctuates from one farmer to the next, which influences the supply rate.Continue Reading
Soybean production ranks highest in North America and South America, and the United States alone produces 37 percent of the global supply, notes Investopedia. However, it faces stiff competition from Brazil, the next largest supplier. Brazil's production waxes and wanes, as environmental regulations sometimes create setbacks, which influences prices and quantity.
In addition to competition, use of technology influences soybean prices. Some farmers use genetic modification in the soybean cultivating process. This technology may reduce soybean plants' vulnerability to certain diseases and pests. As a result, soybean production increases and prices fall. Supply and demand in the U.S. and internationally affects soybean prices, too. Although grown independently, soybean production affects prices of other grains too, such as corn and wheat. Trade and exchange of all grains ultimately affects all of their prices in the U.S. and international markets.Learn more about Agriculture