Soybean is a species of legume native to Eastern Asia. It is an annual plant that may vary in growth habit and height. It may grow prostrate, not growing higher than 20 cm (7.8 inches), or even stiffly erect up to 2 meters (6.5 feet) in height. The pods, stems, and leaves are covered with fine brown or gray pubescence. The leaves are trifoliate (sometimes with 5 leaflets), and the leaflets are 6-15 cm (2-6 inches) long and 2-7 cm (1-3 inches) broad; they fall before the seeds are mature.

Like corn and some other crops of long domestication, the relationship of the modern soybean to wild-growing species can no longer be traced with any degree of certainty. It is a cultural variety (a cultigen) with a very large number of cultivars. However, it is known that the progenitor of the modern soybean was a vine-like plant, that grew prone on the ground.

Beans are classed as pulses whereas soybeans are classed as oilseeds. The word soy is derived from the Japanese word shoyu (soy sauce/soya sauce).

Soybean is the single largest oilseed produced in the World. Of the total 310-320 million tons of oilseeds produced annually, soyabean production alone stands at 170-180 million tons, contributing to over 55% of the global oilseed production. During the last decade, the production of the commodity grew at the rate of 5.35% at the global level. USA, followed by Brazil and Argentina are the major producing countries; India and China are among the other producers.

The commodity has been commercially exploited for its utility as edible oil and animal feed. On crushing the mature beans, around 18% oil could be obtained; the rest being the oil cake/meal, which forms the prime source of protein in animal feeds. Of late, the commodity is being exploited for manufacturing of various snack foods like edible grade soya meal (widely used as 'meal maker'), soya milk, tofu, nuggets, flour, extruded proteins, etc.

Mature Beans, Oil and Meal are the traded forms of soyabean and its derivatives- both in the spot as well as in the futures markets. At the international level, the Chicago Board of Trade (CBOT) is the most vibrant futures exchange, whose prices serve as a 'reference' to all other soyabean markets across the globe.

The market size of the popularly known 'miracle bean' in India is over Rs 5,000 crore. Production of soyabean in the country has been growing at the rate of 5.57% (over the last ten years). With an annual production of 5.0-5.4 million tons, soyabean constitutes nearly 25% of the country's total oilseed production. Of the total bean produced, 6-7 lakh tons goes for direct consumption in the form of 'bean' itself (sowing, human consumption, etc.), leaving the rest of the quantity for crushing- for meal and oil. While the country imports soyabean oil, it is a leading exporter of meal in the Asian region.

Madhya Pradesh is the soyabean bowl of India, contributing 80% of the country's soyabean production, followed by Maharashtra and Rajasthan. Karnataka, Uttar Pradesh, Andhra Pradesh and Gujarat also produce the bean in small quantities.

In India, soyabean is purely a Kharif crop, whose sowing begins by end-June with the arrival of south-west monsoon. The crop, which is ready for harvest by the end of September, starts entering the market from October onwards. Crushing for oil and meal starts from October, peaking during the subsequent two-three months.

While the ready availability of bean is restricted only to the six-month period of October-March, its consumption in the form of oil and meal is spread throughout the year. The domestic production of 5.0-5.4 million tons is not sufficient to cater to the edible oil requirement of the country. Hence, soyabean export from India is not allowed. At the same time, bean imports are also not allowed so as to encourage domestic production. Indore, Ujjain, Dewas and Astha in Madhya Pradesh and Sangli in Maharashtra are the major trading centers (spot markets) of soyabean. Average prices of soyabean in the spot market of Indore have been around Rs 9000-11000/ton during the last two years, 2002-03 marketing season being an exception. During 2002-03, bean prices rallied to Rs13000-14000/ton (and have been largely hovering at around this level beginning the season in November 2002) owing to drastic reduction in production.

Of the total quantity produced during a marketing year, only 22-25% arrives at the mandis (regulated spot markets); the processors directly purchase the rest from the farm gates. The seasonal nature of the production of the commodity against its requirement throughout the year, its close link with its widely consumed derivatives (oil and meal), the nature of the existing supply and value chain, and the industry characteristic of being influenced by the international and regional livestock (especially poultry) and edible oil sectors provides tremendous opportunity for 'trade' in this commodity. The opportunity is further enhanced by the seasonal fluctuation in prices of soyabean and the influence of the vibrant international soy oil and meal markets on the daily price movement of bean.