Seasonality
The calendar patterns in commodity supply and demand, from heating winters to harvest gluts.
Overview
Natural gas peaks in winter heating with a summer injection season, gasoline peaks in summer driving, grains bottom under harvest pressure and rally on summer weather scares when the US crop is made or lost, cattle show spring grilling strength, and hogs peak in summer. Seasonal tendencies are tendencies: the trade works until the year a La Nina or a war overrides the calendar, and speculative flows front run known windows, blunting them. Seasonal charts averaging many years are context rather than forecasts, but storage, freight, refinery maintenance, and planting schedules all follow the sun, and the energy term structure prices it openly.
Related Topics
Futures Contracts
Each contract fixes quantity, quality, delivery point, and months, 1,000 barrels at Cushing, 5,000 bushels in store, so only price...
Spot and Forward Markets
Spot is now: wet barrels, cash grain at the elevator, metal in the warehouse, priced at a location with a differential to the benc...
Contango
The term, an old piece of London exchange slang, describes an upward sloping forward curve where nearby months are cheaper than de...
Backwardation
In backwardation the front month costs more than deferred months: users bid up barrels available now, paying a premium for immedia...