Continue reading...Two of my favorite trading subjects are cycles and seasonality. In this feature, I’ll discuss seasonality in agricultural markets.
I want to start out by emphasizing that seasonality or cycles, by themselves, do not make good trading systems. However, they are great "tools" to add to your "Trading Toolbox."
Seasonality in agricultural markets is a function of supply and demand factors that occur at about the same time every year. For agricultural markets, supply stimuli can be caused by harvest, planting, weather patterns and transportation logistics. Demand stimuli can result from feed demand, seasonal consumption and export patterns.
Livestock futures, too, have seasonal tendencies. Hog and cattle seasonals tend to be caused by production, marketing, and in the case of hogs, farrowing.
Grains tend to follow the general rule of lower nearby futures prices at harvest more than other agricultural commodities.
Here is a quick summary of seasonals in several markets. (If you are...
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