Spread Edge Capital specializes in seasonal spread trading across a wide variety of commodity markets. A spread trade is the simultaneous purchase and sale of the same commodity with different delivery dates.  SpreadEdge publishes a weekly Newsletter that provides several seasonal spread trade opportunities every week.

Overview

Each week the SpreadEdge Newsletter documents an extensive list of seasonal, technical and fundamental indicators for the various commodity markets.  This article will focus on % carry yield for Grains and Softs and dive deeper into Soybean Meal and Arabica Coffee.  

% Carry Yield
Futures calendar curves vary in shape over time. Some often invert, with front-month contract prices exceeding those of later contracts, resulting in positive carry. Conversely, some curves exhibit contango, leading to a negative carry.  % carry yield is the one year calendar curve yield as a percentage of contract notional value.  Markets tend to reverse when they get at or near their highest or lowest levels over the past 52 weeks.
 

• Soybean Meal is once again at its lowest carry yield over the past 52 weeks.  The current yield of (7.6%) is well of the average of (2.5%) and the 52 week high of +5.3%
• Arabica Coffee has been steadily climbing higher and higher for the past year.  The May 2025 contract closed Tuesday at $404.40 which is 16% higher than the May 2026 contract at $339.65.  Traders have the opportunity to sell the May contract and profit as prices roll down towards the May 2026 contract,

Technical Analysis

• Soybean Meal has been riding down the channel since late 2023.  For the past several weeks, SM and traded above the top of the channel at some point during the week only to fall back within the channel by the weekly close.  It would appear that SM will eventually burst aggressively through.
• Arabica Coffee has been parabolic most of this year.  In 2025, KC has already gained over 31% and has more than doubled since late 2023.  Note that the past 3 candles show a fierce battle between the bulls and bears.  It will be interesting to see which direction this market breaks.

More Information

Use coupon code “SpreadEdge” and get the Weekly Newsletter and Daily Alerts for $1 for the first month.  For a limited time, you can receive my Futures Training Videos for free with a 3-month, 6-month, or 12-month subscription.

For a FREE eBook about the SpreadEdge seasonal spread strategy.

The SpreadEdge Weekly Newsletter is published every weekend and provides a broad overview of the important seasonal, technical, and fundamental indicators within the Energy, Grains, Meats, Softs, Metals and Currency markets.  In addition, spread trade recommendations and follow-up on open trades is also provided.  For a free copy of the Weekly Newsletter, please send an email to info@SpreadEdgeCapital.com

Darren Carlat

SpreadEdge Capital, LLC

(214) 636-3133

Darren@SpreadEdgeCapital.com

www.SpreadEdgeCapital.com

Disclaimer

SpreadEdge Capital, LLC is registered as a Commodity Trading Advisor with the Commodity Futures Trading Commission and is an NFA member. Past performance is not indicative of future results. Futures trading is not suitable for all investors, The risk associated with futures trading is substantial. Only risk capital should be used for these investments because you can lose more than your original investment. This is not a solicitation.