Seasonality
Why the plan prices when it does, and where the book sits against that pace today.
Seasonal price shape against the pricing pace
The pace curve is deliberately behind the price peak rather than on it. Nobody prices the top, and a plan that tried to would leave a client unsold in every year the peak came early. The curve puts most of the crop away across the window instead, which gives up the best price in exchange for never taking the worst one.
Month by month
| Month | In the window | Against the annual average | Pace target | Reading |
|---|---|---|---|---|
| Jan | No | -1.0% | 5% | Post-harvest. A storage and basis decision rather than a rally decision. |
| Feb | Yes | +1.0% | 15% | Pricing a crop that does not exist yet, so the market pays for the uncertainty. |
| Mar | Yes | +3.0% | 30% | Pricing a crop that does not exist yet, so the market pays for the uncertainty. |
| Apr | Yes | +5.0% | 45% | Pricing a crop that does not exist yet, so the market pays for the uncertainty. |
| May | Yes | +7.0% | 60% | Pricing a crop that does not exist yet, so the market pays for the uncertainty. |
| Jun | No | +5.0% | 65% | The crop is making. The uncertainty premium is leaking out of the board. |
| Jul | No | +2.0% | 70% | The crop is making. The uncertainty premium is leaking out of the board. |
| AugNow | No | -2.0% | 72% | The crop is making. The uncertainty premium is leaking out of the board. |
| Sep | No | -5.0% | 75% | Harvest pressure. Every farm in the county hauls at once. |
| Oct | No | -6.0% | 80% | Harvest pressure. Every farm in the county hauls at once. |
| Nov | No | -4.0% | 85% | Harvest pressure. Every farm in the county hauls at once. |
| Dec | No | -2.0% | 90% | Post-harvest. A storage and basis decision rather than a rally decision. |
TODO: these indices are the desk's stated methodology, broadly consistent with long-run seasonal studies, and they are not a fit to a named data set with its years and its source on the page. That work has to happen before anybody makes a decision from this chart rather than from their own position. Wheat is the crop that breaks the pattern: it is cut in June, so its harvest pressure arrives while corn and beans are still growing, and its window closes earlier.
A seasonal tendency is not a forecast. Any individual year can ignore it entirely, which is exactly why the plan carries sell-by dates as well as price targets: the time stop is what protects a client in the year the pattern does not show up.