This year, drought fears in July caused grains to shoot through the roof after news of a highly damaged corn and soybean crop. So far this summer has not reflected normal weather conditions, with drought conditions likely to support grain prices throughout the remainder of the summer. If I were going to put on a grain trade, I may decide go long a calendar spread. From what I have heard about this year’s corn crop, I do not see prices falling before the harvest.
Cattle prices are usually strong in August, continuing through February, while hogs are typically weak throughout the month.
The end of August is typically a bullish period for gold, with silver prices increasing as well. Inversely, copper prices start to decline as the peak summer construction season comes to an end. Thirty year Treasury prices also typically move in the opposite direction of gold and stocks by hovering in a weak month.
The EUR/USD pair is typically weak through about Labor Day while the Swiss Franc is typically at its seasonal low around the beginning of the month. The British Pound is also typically weak during this period continuing through September.
The Yen as the tendency to post lows against the dollar starting in late August through early October as August marks the halfway point in Japan’s fiscal year.
Sugar typically experiences seasonal lows in August is the end of the sugar cane harvest season in Brazil and India and the sugar market is flooded with new supply.
Historically, crude stays strong through August with the possibility of a downward slide toward the end of the month. Natural gas typically rises starting in late July through around December. Consumers use more natural gas when the weather reaches extreme highs and lows.
David Cornes holds a degree in economics from the University of Montana.
