Most comprehensive works on seasonality include not only agricultural markets but currencies, interest rates, and indices. Common sense tells us that the primary feed grains follow a clear seasonal pattern based upon a single crop year. This calendar cycle also applies to coffee, cocoa, and oranges, although competition from South America has limited the extreme moves that resulted from a freeze in Florida’s orange groves. Grain seasonality has been slowly changing as well, as Brazil improves their production of soybeans. Cattle and hog prices, dependent upon the cost of feed, and still marketed more actively in the fall because of weather, show a strong seasonal trend even though they have a growth and feeding cycle that is not confined to a calendar year. Livestock patterns have adjusted to long-term competition from Australia and New Zealand.
These agricultural markets are reasonable candidates for seasonal analysis, but may require careful study to identify shifting patterns in competition and storage. What about Treasury bonds or the Japanese yen? Should we look for seasonal patterns in the financial markets? While we can argue that certain stocks are highly dependent upon seasonal business, can we say that the demand on money is higher in the summer than in the winter, or that enough tourists convert their currencies to yen when they visit japan during the summer that this effect drives the value of the yen consistently higher? Are automobile exports from japan stronger or weaker during a certain season, so that there is a predictable pattern? These scenarios are highly unlikely and have no assurance, such as the coming of winter, that cars must be sold the way grain must be harvested. In financial markets the players can choose their time to act; they can hedge their commitments or wait for a better opportunity. This choice makes any pattern that might exist uncertain. The study of seasonality should be limited to those markets that depend on weather and seasons, either directly or indirectly.