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Below is the heat map for Corn Commodity over the last 5 years.
As can be seen in the image below, the month of August has been negative for the commodity in all of the last 5 years. Corn has lost an average 6.38% the month of August with the maximum loss being 9.8% and minimum loss being 1.5%.
During the planting months, spring for corn, the source of grain that is available for sale or purchase is from the crops that were harvested during the previous harvest season—the old crop. On the other hand, during the harvest months, typically November and December for corn the newly harvested crop comes to market and supply is higher—hence, the new crop.
With corn, the most pronounced seasonal trend is the tendency for prices to be near their highest level around early July because of the uncertainty around new crop production, then to decline from mid-summer into the harvest season. As a result, corn prices typically correct in the month of August. By December most of the worlds corn has been harvested and the majority of the next year’s crop won’t even be planted for another three to four months. Thus, prices typically begin to rise as investors start to price in unknowns surrounding next year’s harvest. The upward trend historically continues through the spring planting season.
Its important to understand that the seasonal patterns and pricing tendencies described here can be affected by other fundamentals, such as weather and production issues in other importing or exporting countries and past patterns may not always hold true in the future.
Risks & Assumptions
Data Source: Bloomberg
Arun Leslie John
Chief Market Analyst
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