Getting Started in Commodities

Chapter 12

Seasonal Commodity Patterns

Entire textbooks have been written about the seasonal patterns that influence the commodity markets. Most of these books, however, only touch the surface of how commodity markets react during certain times of the year to seasonal factors. One of the most comprehensive sources for the analysis of seasonal patterns can be found in the CRB Commodity Yearbook. Published by the Commodity Research Bureau each year and long considered the bible of commodity research, the CRB Commodity Yearbook includes current seasonal patterns as well as data from the past 10 years. In this chapter, I will provide a synopsis of my favorite seasonal patterns and how they affect commodity markets.

Smart Trader Tip

Seasonal factors have an impact on the performance of various commodities year-round. While traders can't always plan their trades around seasonal factors, it would be unwise to ignore them, as commodities are obviously affected by weather changes (oil in wintertime, utilities in summertime, etc.).

What Is a Seasonal Pattern?

Seasonal patterns are identified by associating various interactive factors throughout a year, month, or even a day. A seasonal pattern can be a short-term pattern, which I would identify as an intraday pattern (within a day), a weekly pattern, or even a monthly pattern. The events that affect the price of a commodity on a consistent ...