Live Cattle and Feeder Cattle:
Seasonality in feeder cattle prices depends on the seasonality in live cattle prices, along with annual fluctuations in feeder cattle supplies. In general, feeder cattle prices are strong from late winter through spring, drop during the summer, and stabilize at lower levels in the fall, before turning up in December. Live cattle prices normally trend higher from January through May. Prices for live cattle reach their seasonal peak in May, and then usually begin a downtrend that extends through the end of the year. Demand for feeder cattle also begins to peak in May, and prices fall into July.
Live Hogs: Seasonal marketing pressure increases during March and persists at increased levels during all or part of April. The reason for this is that August and September farrowings are usually larger, relative to other farrowing months. Slaughter levels decline seasonally from March-April into July or August. Thus, prices could generally be expected to rise from March to May and decline from May into August.
Cocoa: The yearly seasonal low tends to occur in January with the Bahia (Brazil) main crop, rather than in May or June with the Temporao (Brazil) crop, because of consumer demand. Consumer demand tends to rise into late fall and early winter, which boosts prices during that time frame. As demand peaks and then begins to decline, cocoa prices fall into January. It's important to note that seasonal tendencies in cocoa are not very strong.
Coffee: The frost season in Brazil occurs during the May through early-August period. In anticipation of this frost, prices tend to rise from January into June. This seasonal tendency is not very strong, however, because coffee can come from other producing countries - such as Mexico. Still, the potential for a Brazilian frost should be monitored. The other seasonal influence is during the winter, when U.S. coffee consumption tends to rise.
Cotton: Cotton is a market where the "trade" has very heavy participation and seasonals tend to be a function of heavy deliveries issued against the expiring futures contracts - December, March, May, July, and (to a lesser degree) October. In November, the market tends to recover from harvest lows, and then tends to back off to lower levels in January.
Orange Juice: Seasonal price movement of FCOJ (Frozen Concentrated Orange Juice) does not usually reflect the December-February freeze period in the southern U.S. Seasonal tendencies are caused by harvest, production (also called "pack") and demand ("movement"). The most significant seasonal move in O.J. is that prices generally fall from November to January. Freezes cannot be completely ignored, however.
Sugar: Prices tend to peak in November because of a combination of supply and demand. Production at this time is not complete, as the European crop is not yet on the market. Demand in the Northern Hemisphere, however, is usually at its peak in the fall.
As a note of caution on seasonality, there has been much hype in the marketplace regarding seasonals. I remember one summer hearing a radio advertisement from a futures brokerage that went something like this: "Colder weather is just around the corner and heating oil demand will increase. Thus, you should buy heating oil futures now, and profit from the increase in demand." Every professional trader and commercial firm knows that heating oil demand rises in the winter. And even in the summer months, they have already factored that rise in demand into the prices of the farther-out (deferred) futures contracts. The same is true for other markets' seasonal price patterns.
The professional traders and commercials all know about seasonals in the markets, and position themselves accordingly. However, it is always good that speculators have as much information on markets as possible. Seasonal price patterns are just one more bit of information to factor into trading decisions.
This article was one chapter that I pulled from my e-book, "Sharpening Your Trading Skills," which you can obtain without cost by clicking here. There are seven other unique and equally valuable chapters, which include information on defining different market orders for trading entry and exit, Fibonacci numbers, two popular oscillators, and the methods of trading legends of the early 20th century.
That's it for now. I enjoy hearing from my readers all over the world. If you have any questions, or just want to drop me an email to say hi, I'd love to hear from you. I do promptly answer all emails. My email address is jim@jimwyckoff.com. | 
