A lease agreement is a contract where one party (lessor) grants another party (lessee) the right to use an asset for a specified period in exchange for periodic payments. In commodity markets, lease agreements cover storage facilities, transportation equipment, production infrastructure, and mineral rights. These contracts define usage terms, payment schedules, and responsibilities of both parties.

Lease agreements provide operational flexibility without requiring large capital investments, making them attractive for managing seasonal demand variations or temporary capacity needs. Lease rates fluctuate based on supply-demand dynamics for specific assets and locations. Understanding lease market conditions helps optimize operational costs and capacity planning for commodity businesses.

Real-world example: A grain trader leases storage silos for $0.15 per bushel per month during harvest season, providing temporary storage capacity without permanent facility investment while managing seasonal grain flow and pricing opportunities.