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Seasonality and Its Effects on Crop Markets

Mark Welch, Steve Amosson, Mark Waller and, William Tierney, Jr. (November, 2011)

Summary

Seasonality is the phenomenon that causes crop prices (including cash, futures, basis, option volatility, intramarket, intermarket, and inter-commodity spreads) to behave in a relatively predictable manner, year in and year out. Generally speaking, there are two major components to crop seasonality: 1) the harvest lows, followed by 2) the post-harvest rally. Sometimes seasonality is a strong element of the pattern of crop consumption (domestic usage as well as exports).