SEASONALITY IN FUTURES MARKETS
Plain English
Many futures markets have consistent seasonal tendencies. Natural gas tends to rally heading into winter. Gasoline peaks in spring as summer driving demand rises. Grains spike during planting and drought season. Seasonality doesn't work every year, but it provides useful context for higher-probability trades.
Going deeper
Seasonality is the tendency of certain commodities to exhibit recurring price patterns at specific times of year, driven by predictable supply and demand cycles. Key seasonal patterns: Crude Oil — tends to bottom in January, rally through spring (refinery maintenance → demand pickup → summer driving season). Natural Gas — builds inventory from April through October, draws down from November through March (heating demand). Corn/Soybeans — 'weather market' peaks in June-July (pollination risk), then harvest pressure in October-November. Cattle — tend to be strongest in Q1-Q2 (tight winter supply). Gold — historically has a seasonal tendency to strengthen in August-September. Seasonality is a secondary tool — always combine with fundamental and technical analysis.
Examples
Gasoline Seasonal
US gasoline demand increases Memorial Day through Labor Day (summer driving season). Refiners ramp up production starting in February-March. Gasoline crack spread traders often go long the spread in January-February and exit by June, capturing the seasonal production run-up.
Natural Gas Winter Trade
Natural gas storage is drawn down Oct-Mar. Historically, NG often rallies from September through January as winter demand approaches. Traders position long NG in September, targeting weather-driven spikes. If winter is mild, the trade fails — seasonality provides direction, not certainty.