A seasonal spread involves trading price relationships between different delivery months of the same commodity, capitalizing on predictable seasonal supply and demand patterns. These spreads exploit recurring seasonal factors such as harvest cycles, weather patterns, or consumption seasonality that create consistent price relationships.

Seasonal spreads often exhibit more predictable patterns than outright price movements, making them attractive for risk-conscious traders. Understanding seasonal fundamentals, storage costs, and historical patterns is crucial for successful seasonal spread trading. These strategies work best in commodities with clear seasonal demand or supply cycles.

Real-world example: A trader buys July corn futures and sells December corn futures in March, expecting the spread to widen as planting concerns increase near-term prices while post-harvest December prices remain stable, reflecting seasonal supply anxiety.