SpreadEdge Capital specializes in seasonal spread trading across a wide variety of commodity markets. A spread trade is the simultaneous purchase and sale of the same commodity with different delivery dates.  SpreadEdge publishes a weekly Newsletter that provides several seasonal spread trade opportunities every week.

% Carry Yield

Futures calendar curves vary in shape over time. Some often invert, with front-month contract prices exceeding those of later contracts, resulting in positive carry. Conversely, some curves exhibit contango, leading to a negative carry.  Below are the % carry yields for most of the Ag markets.  Note that all data is based on the end of day close prices from Tuesday of each week.

Agriculture % Carry Yield

• Robusta Coffee has its highest carry yield score for the past year.  Live Cattle is near its highest score.
• Cotton has its lowest carry yield score for the past year.  Soybeans is near its lowest score.

52-Week Graphs

How to Trade These Markets

Seasonality for Cotton is bearish so I am not looking to trade a bounce in Cotton.  However, seasonality is negative for Robusta Coffee so the set-up going into seasonal weakness is excellent.  I'm planning to sell the November, January calendar spread late next week.

More Information

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The SpreadEdge Weekly Newsletter is published every weekend and provides a broad overview of the important seasonal, technical, and fundamental indicators within the Energy, Grains, Meats, Softs, Metals and Currency markets.  In addition, spread trade recommendations and follow-up on open trades is also provided.  For a free copy of the Weekly Newsletter, please send an email to info@SpreadEdgeCapital.com

Darren Carlat

SpreadEdge Capital, LLC

(214) 636-3133

Darren@SpreadEdgeCapital.com

www.SpreadEdgeCapital.com

Disclaimer

SpreadEdge Capital, LLC is registered as a Commodity Trading Advisor with the Commodity Futures Trading Commission and is an NFA member. Past performance is not indicative of future results. Futures trading is not suitable for all investors, The risk associated with futures trading is substantial. Only risk capital should be used for these investments because you can lose more than your original investment. This is not a solicitation.