If you’ve followed this newsletter or the OptionSpreaders.com blog for any period of time, you know that seasonal tendencies in commodities can be a great place to start when identifying premium collection opportunities.
Nowhere is this more true than in the grain and oilseed markets, where planting and harvest cycles can have a heavy influence on prices.
But blindly following seasonal tendencies carries risk. The underlying fundamentals driving these tendencies can shift, arrive early, arrive late or in some cases, not materialize at all.
This is why combining fundamental analysis with seasonal tendencies can be so powerful in commodities option selling.
This month, you’ll discover how applying these two tools to the soybean market could help identify premium opportunities in Q4.
Harvest Time: Big Supply Expected
As you read this, the 2026 U.S. Soybean Harvest is well underway. And despite weather concerns, it’s expected to be a whopper.
The October USDA Supply/Demand report put production at 4.562 billion bushels, with yield estimates increasing to 53.1 bushels per acre from 52.8 in September. USDA raised expected 2026/27 ending stocks to 315 million bushels from 310 million.
That puts projected stocks to usage at approximately 6.9%, down from 7.3% last season. A bigger crop, but a smaller cushion relative to demand. This paints a different fundamental picture than the harvest total alone might suggest.
U.S. Soybean Ending Stocks vs Stocks/Usage Ratio
Demand has been doing some heavy lifting. USDA projects domestic crushing at 2.780 billion bushels, up from 2.646 billion last season. Export demand still matters, but processors at home are consuming more beans as well.
The Seasonal Contradiction
Soybean prices tend to come under pressure as the U.S. harvest brings new supplies to market. This is one reason option sellers watch summer weather rallies with interest.
Why? Because harvest is when supplies become available in volume. Thus, economics 101 suggests that when supplies increase, prices can come under pressure. Soybeans have often found seasonal lows during or immediately after the U.S. harvest.
May Soybeans (CBOT) 5/15/30 Year Seasonal
After that, however, a new phenomenon occurs. Sales orders get filled and farmers begin drawing down supplies again. This gradual filling of orders throughout fall and winter can help draw soybean prices higher again.
This presents an interesting dilemma for option sellers. Do you blindly trust the seasonal and go long, laying out a string of put credit spreads? Or do you first consider the fundamental factors that underpin the seasonal?
The Answer to the Seasonal Dilemma
You’re going to get one of the more useful lessons in fundamental trading this month.
And it is this:
When fundamentals and seasonals align, the seasonal deserves a closer look.
When fundamentals and seasonals contradict, examine what is keeping prices from moving too far either way.
In 2026, the contradiction is not simply bearish fundamentals against a bullish seasonal. It is the size of the incoming crop against the demand working to absorb it.
Conclusion and Strategy
Selling calls into summer weather rallies can make sense when both fundamentals and the seasonal tendency point toward harvest pressure. However, with harvest underway, a different set of questions is in order.
With a large U.S. crop arriving and USDA forecasting Brazilian production of 186 million metric tons in 2026/27, supplies could act as a drag on further price strength. The Brazilian estimate remains a forecast, with the growing season still ahead.
At the same time, domestic crushing and export shipments draw down inventories. This demand could serve as an effective counterweight to expanding production.
There is a timing issue as well. Only 25% of the U.S. soybean crop had been harvested by October 4, versus a five-year average of 33%. Beans still in the field cannot immediately meet a processor’s needs. Harvest delays can support prices even when the expected crop is large.
These balancing counterweights could present opportunities for option sellers through the use of credit spreads.
When fundamentals and seasonals contradict, the opportunity may depend on which side of the market offers the better premium for the risk.
A call credit spread pairs a sold call with a purchased call at a higher strike. A put credit spread pairs a sold put with a purchased put at a lower strike. Using both creates an iron condor, giving prices latitude to move between the short strikes while the purchased options limit the structure’s expiration loss.
After researching this market, it is our opinion that soybeans have credible forces working on both sides. That does not guarantee a trading range. A change in harvest yields, export demand or South American weather could shift the balance.
May 2027 Soybeans
At OptionSpreaders.com, we will be watching for rallies that could offer opportunities to position call credit spreads and pullbacks that could favor put credit spreads in our managed accounts, provided the fundamentals support the position and the available premiums justify the risk.
A seasonal tendency can be a great place to start. But before you sell the option, consider the fundamentals that underpin it.
Risk Disclosure: Trading futures and options on futures involves substantial risk of loss and is not suitable for all investors. Certain option-writing strategies, particularly uncovered positions, may involve substantial or potentially unlimited losses. Adverse market movements may also result in increased margin requirements and the need to deposit additional funds. OptionSpreaders.com utilizes spread-based strategies intended to offset or limit certain risks, but spreads do not eliminate the possibility of substantial loss. Investors should carefully consider whether these strategies are appropriate in light of their financial condition, investment objectives and ability to bear risk. Past performance is not necessarily indicative of future results.
