Question

What are the seasonal patterns for Corn, Beans, and Wheat futures contracts? During which seasons do these prices rise and fall?

Answer 1

For grains and oilseeds, during the planting months (spring for corn and soybeans and fall for winter wheat), the source of grain that is available for sale or purchase by end users is from the crops that were harvested during the previous harvest season—the old crop.

On the other hand, during the harvest months, typically July for winter wheat and November and December for corn and soybeans, the newly harvested crop comes to market and supply is higher—hence, the new crop.

During the old crop months, when supply is typically lower, grain tends to be priced higher than the farther out new-crop trading months.

When a new crop is harvested, there is once again a higher level of supply. This is why many of the grain markets tend to reflect their lowest seasonal prices during the new crop trading month.

Wheat markets have a tendency to decline between spring and the July harvest, then begin to rise from these harvest lows into fall and winter.  

With soybeans, harvest begins in September, and continues through October into mid-November. Soybeans tend to follow a pattern where prices begin to decline in the July-August time frame, continuing through “February break,” before reaching their seasonal highs in the summer.

With corn, the most pronounced seasonal trend is the tendency for prices to be near their highest level around July because of the uncertainty around new crop production, then to decline from mid-summer into the harvest season.