What does the term contango mean? - ProProfs Discuss
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What does the term contango mean?

What does the term contango mean?

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Asked by Luke, Last updated: Nov 09, 2024

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John Smith

John Smith

John Smith
John Smith

Answered Sep 08, 2016

The price of a commodity for future delivery is higher than the spot price -contango is a condition in the market where the price of a commodity for future delivery is higher than the spot price. it is an old term for positive carrying charges. as of early summer 2009, the corn market is in contango. the new crop dec09 futures contract is trading at about a 20 cent premium to the nearby jul09 contract. soybean market is not in contango the nearby jul09 contract trades at a sharp premium to deferred contracts. the condition in soybeans is a subject for a future question.
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