Agricultural Commodities and Seasonality
Why Agricultural Prices Follow Calendars
Agricultural commodity prices move on seasonal rhythms that other commodities lack. Corn, soybeans, and wheat can only be planted during specific windows, grow during summer months, and get harvested in fall. Weather during these critical periods can make or break the crop, creating predictable windows of price volatility.
The practical point: understanding the crop calendar helps you interpret agricultural price movements and recognize when weather reports will move markets versus when they're noise.
The Major Crops: Corn, Soybeans, Wheat
These three crops dominate US agricultural commodity trading, all traded on the Chicago Board of Trade (CBOT).
Corn
US production context:
- Annual production: ~13-14 billion bushels
- Planted acres: ~90-95 million acres
- Primary uses: Animal feed (40%), ethanol (35%), exports (15%), food/industrial (10%)
- Global rank: US produces ~30% of world corn
Price range (2020-2024): $3.00 - $8.00 per bushel
Soybeans
US production context:
- Annual production: ~4-4.5 billion bushels
- Planted acres: ~85-90 million acres
- Primary uses: Crushing (meal for feed, oil for food/biodiesel), exports
- Key export customer: China (60% of US soybean exports)
Price range (2020-2024): $8.00 - $17.00 per bushel
Wheat
US production context:
- Annual production: ~1.6-1.9 billion bushels
- Planted acres: ~45-50 million acres
- Types: Winter wheat (planted fall, harvested summer), spring wheat (planted spring, harvested fall)
- Primary uses: Food (bread, pasta), feed, exports
Price range (2020-2024): $4.50 - $13.00 per bushel
The US Crop Calendar
Understanding when each growth stage occurs reveals when prices are most sensitive to weather.
Corn Calendar
| Month | Stage | Price Sensitivity |
|---|---|---|
| April | Planting begins | Moderate (wet delays raise concern) |
| May | Planting completion | High (late planting reduces yield potential) |
| June | Vegetative growth | Moderate |
| July | Pollination | Very High (heat/drought critical) |
| August | Grain fill | High (determines final yield) |
| September | Maturation | Moderate |
| October-November | Harvest | High (wet delays, early frost) |
Critical window: Late June through July. Pollination requires adequate moisture and moderate temperatures. A week of 100°F+ heat during pollination can cut yields 10-30%.
Soybean Calendar
| Month | Stage | Price Sensitivity |
|---|---|---|
| May | Planting begins | Moderate |
| June | Planting completion | High |
| July | Vegetative growth | Moderate |
| August | Pod fill | Very High (moisture critical) |
| September | Maturation | High |
| October | Harvest | Moderate to high |
Critical window: August pod fill. Soybeans need consistent moisture during August. Drought stress during pod development directly reduces yield.
Winter Wheat Calendar
| Month | Stage | Price Sensitivity |
|---|---|---|
| Sept-Oct | Planting | Low to moderate |
| Nov-March | Dormancy | Moderate (winterkill risk) |
| April-May | Spring growth | High |
| June | Heading/flowering | Very High |
| July | Harvest | High |
Critical window: April through June. Late spring freeze or drought during heading reduces yield significantly.
Weather Risk: What Moves Prices
Agricultural prices respond to weather forecasts during critical growth periods.
Drought
Impact mechanism:
- Reduces available soil moisture for plant uptake
- Stress during pollination (corn) or pod fill (beans) cuts yields
- Extended drought reduces acres harvested
Historical example (2012 drought):
- Corn: Yield fell from 147 to 123 bushels/acre (-16%)
- Price: Rose from $5.50 to $8.30/bushel (+50%)
- Soybeans: Similar price spike from $13 to $17
Excessive Rainfall/Flooding
Impact mechanism:
- Delays planting (each day late after optimal window costs ~1% yield)
- Causes root rot and disease
- Delays harvest (quality deterioration)
Historical example (2019 flooding):
- Record late planting: 20% of corn planted after June 1 (vs. normal 3%)
- Prevented planting claims: 20 million acres (record)
- Price: Corn rose from $3.50 to $4.50 (+29%) during planting delays
Early Frost
Impact mechanism:
- Kills immature plants before grain is fully developed
- Reduces test weight and quality
- Most damaging for late-planted crops
Historical example (September frost events):
- Early frost in northern Corn Belt can cut yields 5-15%
- Affects crops planted late due to earlier wet spring
USDA Reports: The Market Movers
The US Department of Agriculture releases reports that move agricultural commodity prices more than any other scheduled data.
World Agricultural Supply and Demand Estimates (WASDE)
Release: Monthly (around 12th of each month at 12:00 PM ET)
What it contains:
- US and global production estimates
- Demand projections by category
- Ending stocks forecasts
- Import/export estimates
Why it matters: WASDE ending stocks estimates directly affect prices. Lower stocks = higher prices.
Market reaction: Price moves of 3-5% are common on report days when estimates surprise.
Crop Progress Report
Release: Weekly (Monday afternoons during growing season)
What it contains:
- Percent of crop planted/emerged/harvested
- Crop condition ratings (excellent, good, fair, poor, very poor)
Why it matters: Condition ratings track yield potential. A shift from "good" to "fair" condition signals developing problems.
Example interpretation:
- Corn condition: 65% good/excellent (vs. 70% last week)
- Interpretation: Weather stress reducing yield potential
- Expected price reaction: Bullish (lower supply expected)
Prospective Plantings Report
Release: End of March (one of the most important annual reports)
What it contains: Farmer survey of intended planted acres by crop
Why it matters: Sets the framework for the coming year's supply. Large shifts between corn and soybean acres affect both markets.
Grain Stocks Report
Release: Quarterly (end of March, June, September, December)
What it contains: Physical inventory of grain in storage
Why it matters: Confirms or contradicts WASDE demand estimates. Surprise inventory levels move prices.
Storage and Logistics
The physical infrastructure for moving grain affects prices.
Elevators
Function: Local collection points where farmers deliver grain
Key metrics:
- Basis: Local elevator price vs. CBOT futures (reflects local supply/demand)
- Capacity utilization: Full elevators signal strong harvest, potential delivery delays
Export Terminals
Major locations: Gulf Coast (Louisiana), Pacific Northwest (Portland)
What to watch:
- Barge rates (Mississippi River transport)
- Rail car availability
- Port congestion
- Export pace vs. USDA projections
Example: When Mississippi River levels dropped in fall 2022, barge rates tripled and Gulf basis widened, reducing US export competitiveness.
Seasonal Price Patterns (Typical, Not Guaranteed)
| Crop | Seasonal Low | Seasonal High | Pattern Driver |
|---|---|---|---|
| Corn | October-November | June-July | Harvest pressure → weather uncertainty |
| Soybeans | October | June-August | Harvest pressure → South American crop |
| Wheat | June-July | March-April | Harvest → uncertainty before new crop |
The calculation: Average seasonal ranges are 15-25% from low to high in normal years, wider in weather-stressed years.
Caveat: Seasonal patterns describe tendencies, not guarantees. Global events (Ukraine war, export restrictions, demand shocks) override typical seasonality.
Practical Monitoring
Essential (understand market context)
- Track WASDE release dates (mark calendar)
- Watch weekly crop condition ratings during growing season
- Note weather forecasts for Corn Belt during June-August
- Monitor US dollar (affects export competitiveness)
High-impact (for active tracking)
- Compare analyst estimates to USDA actuals on report days
- Track export sales pace vs. USDA projections
- Monitor South American weather (Brazil, Argentina are major producers)
- Watch basis levels at key delivery points
Optional (for deeper analysis)
- Model stocks-to-use ratios across crops
- Track commitment of traders (COT) positioning
- Follow fertilizer prices (input cost for next year)
- Monitor ethanol blend rates and RFS mandates
Reading Agricultural Price Signals
| Price Signal | Likely Cause | Verification |
|---|---|---|
| Sharp rise in June-July | Drought/heat concern | Check forecast, crop conditions |
| Sharp fall in October | Harvest pressure, good yields | Check progress report |
| Rise despite good conditions | Export demand or fund buying | Check export sales, COT data |
| Fall despite poor conditions | Demand destruction or macro selling | Check WASDE demand, dollar strength |
Example interpretation: July corn rises 8% in one week. Check: (1) Is there a heat wave forecast for the Corn Belt? (2) Did condition ratings drop? (3) Any USDA report surprises? If conditions dropped from 68% to 60% good/excellent, the price move reflects genuine supply concern.
References
Source: US Department of Agriculture. World Agricultural Supply and Demand Estimates (WASDE). Monthly reports.
Source: US Department of Agriculture. Crop Progress and Condition Reports. Weekly during growing season.
Source: CME Group. CBOT Corn, Soybean, and Wheat Futures Contract Specifications. 2024.
Source: US Department of Agriculture. Agricultural Projections to 2033. 2024.