Old Crop vs. New Crop

June 26, 2015 6:40AM CDT

Old Crop vs New CropThis is the time of year we normally see old crop versus new crop trades in many of the grain markets. New traders are often confused because current market prices are much higher than the further out contract months. For example: July beans are trading at 981¾ whereas November beans are trading at 956.

Old crop prices tend to remain strong, until prospects for the new crop are better known. Therefore prices go up as supplies approach their tightest levels of the year. Prices are likely to remain strong until the crops get through critical planting stages and the risks of summer heat and drought. Grain markets all follow a regular cycle of planting and harvesting, regardless of weather conditions.

March and April are the planting months, whereas late September through early November are the harvesting months. So March, May, July, August and early September are considered OLD CROP. November, December and January represent NEW CROP.

 


 

Seasonal tendencies are a composite of some of the most consistent commodity futures seasonal that have occurred in the past several years. There are usually underlying, fundamental circumstances that occur annually that tend to cause the futures markets to react in similar directional manner during a certain calendar year even if a seasonal tendency occurs in the futures, it may not result in a profitable transaction as fees and the timing of the entry and liquidation may impact on the results. No representation is being made that any account has in the past, or will in the futures, achieve profits using these recommendations. No representation is being made that price patterns will recur in the future. Past performance is not indicative of future results.

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