Two of the four factors that we use to determine whether one should price the futures is the seasonal trend and profitability of the current price.
If the seasonal trend is down, that is a sell indicator; if the seasonal trend is up, don’t sell signal.
If the current price is profitable, that is a sell signal; if not profitable, don’t sell signal.
If you had priced a substantial percentage of your corn the third week in June every year if the price was profitable, priced your soybeans the second week in July if the price was profitable and your wheat the early part of January if the price was profitable and, ignored everything else for the past 30 years, you would be one of the largest land owners in your community today. For you young guys, profitable prices at the seasonal price peak will make you a lot of money in the coming decades, even you ignore everything else, which is very hard to do!
Think about it: in 2020, corn and beans were not profitable in June and July, so no sale. Later, $5 corn and $14 beans. Wheat was profitable in Jan 2020 with the high on 22 January: sold!
In 2019, December corn peaked at $4.73 on 17 June; price was profitable at the seasonal top, so you sell. November beans were in the $9.20 to $9.30 range the second week of July 2019… Maybe profitable, maybe not. After trading down to $8.51 in August, November beans traded above $9.40 in October.
Soybeans 50 Year Chart
Corn 50 Year Chart
Corn 20 Year Chart
Wheat 30 Year chart
Oats
This pay site has a lot of information, but I am not saying it is a good or bad source of information: https://www.seasonax.com/
Comments