Seasonality often plays a part in determining prices for commodities in regular cycles throughout the year. Normal increases and decreases in supply and demand for particular commodities seem to occur every year in fairly consistent patterns. However, remember that commodity seasonal patterns are just that – tendencies.
Cocoa – Coming
Coffee is rallying into May making a top and then declining into the June – August time frame, then a new rally begins.
Corn can be divided in three periods: Late spring to mid-summer, midsummer to harvest and post harvest. Planting season starts in late spring, hence this is also the period with lowest prices. Prices are at their peak in July because most are old stock and there is also an uncertainty over the harvest. Prices typically rise after the harvest but will start to decline by February.
Cotton is rallying into May making a top, and then declining into November, from then on a new rally begins.
Lean hogs have a strong seasonal tendency to move higher from late February until May. Hog inventories usually drop during this period as packers buy ahead of the summer grilling season.
Lumber is rallying into February making a top, and then declining into late September.
Soybeans tend to move higher seasonally from February and peak in June. Much of the anxiety over crop losses diminish once the crops are in the ground and this is wrapped up normally by early June. Prices tend to drop during the summer if there are no major weather problems – prolonged drought and major floods. Grain prices tend to drop and bottom during harvest, which is around October.
Sugar is rallying into January making a top, and then declining into late September, from then on a new rally begins.
Wheat is declining into late June making a bottom, and then rallying into October making a top,from then on a new decline begins.