Seasonality
Recurring, calendar-driven price patterns in commodities caused by predictable cycles in supply (harvest) and demand (weather-driven consumption).
Seasonality refers to systematic, repeatable price tendencies linked to the calendar. In commodities, seasonality arises from two sources: predictable supply cycles (crop planting and harvest windows create annual lows and highs in grain prices) and predictable demand cycles (winter heating demand for natural gas, summer driving demand for gasoline).
Corn typically bottoms at harvest (October) as new crop supply hits the market and rallies into summer as stocks are drawn down. Natural gas typically weakens in shoulder months (spring and fall) and spikes in winter and summer. Gasoline demand peaks in US summer driving season (May–August).
Seasonality is not deterministic — an abnormal weather year or a supply shock can overwhelm seasonal tendencies. But it provides a useful base-rate probability backdrop for timing entries and exits.
Example
A trader tracks the 10-year average natural gas price in January versus May. The data shows gas averages 18% higher in January due to heating demand. In a normal weather year, being long the Jan/May spread during autumn has historically captured this premium.
Related Terms
Agricultural Commodities
Farm-produced goods traded on futures exchanges — grains (corn, wheat, soybeans), oilseeds, and livestock — with prices driven by weather and seasonal crop cycles.
BeginnerCrush Spread
The price difference between soybeans and their processed products (soybean meal and oil), representing the processing margin for soy crushers.
AdvancedEnergy Complex
The collective term for energy-related commodities — crude oil, natural gas, refined products (gasoline, heating oil, diesel) — and the markets and instruments around them.
BeginnerHeating Oil
A distillate fuel oil used for space heating and as a diesel proxy, traded on NYMEX in $/gallon and a key component of crack spread calculations.
IntermediateNatural Gas
A hydrocarbon energy commodity priced in $/MMBtu on NYMEX, known for extreme seasonal volatility driven by heating and cooling demand.
IntermediateRBOB Gasoline
Reformulated Blendstock for Oxygenate Blending — the US benchmark unleaded gasoline futures contract traded on NYMEX in $/gallon.
IntermediateSofts
Agricultural commodities that are grown rather than mined or extracted — primarily coffee, sugar, cocoa, cotton, and orange juice, traded on ICE Futures.
IntermediateSpread Trade (Commodities)
A trade that goes long one commodity contract and short a related one — exploiting price relationships between grades, delivery months, or related products.
IntermediateWASDE Report
The USDA's monthly supply-demand report for major US and world crops and livestock — the single biggest scheduled catalyst for grain and oilseed futures.
Intermediate