Research on the Factors Affecting Soybean Futures Price in China

Abstract

With the optimization of China's futures market system, our country has a more sound futures trading system. Soybean futures are an important variety of agricultural futures. The fluctuations in the soybean futures market will have a strong impact on operators, investors, and farmers. Therefore, analyzing its influencing factors is of great significance for predicting the fluctuations of soybean futures prices.

Against the backdrop of the increasingly sound system of China's futures market, soybeans, as a core agricultural futures product, have significant impacts on all parties in the industrial chain due to their price fluctuations. To accurately predict price trends, this study integrates theoretical and literature-based approaches, selecting key variables such as the US dollar exchange rate, market supply and demand, and the closing price of the soybean oil index. Through principal component analysis, three principal factors were extracted from 13 initial factors, and a regression model was constructed between these factors and soybean futures prices. The empirical results show that the rise in the closing prices of soybean oil and soybean meal indices is a significant driving force behind the increase in soybean futures prices. Based on this, the study provides specific recommendations for price prediction and risk management in soybean futures.