Why Futures Contract Months Have Different Prices
Learn why two futures contracts on the same market can trade at different prices, how carry, inventory, expectations, seasonality, and time to delivery shape the curve.
Direct answer
Two futures months can trade at different prices because each represents the same market at a different future date. Carry costs, inventory value, seasonality, expected supply and demand, rates, and contract rules can all affect the difference.
Each contract month is a separate instrument
A June future and a September future may reference the same underlying market, but they mature on different dates.
That means they are not duplicate contracts. Each month has its own time to settlement, liquidity, delivery or cash-settlement timeline, and relationship to spot.
The sequence of listed prices across maturities is the futures curve.
Front month versus active contract explains why the most liquid month can also differ from the nearest expiry.
Carry can make deferred contracts more expensive
For storable commodities, holding inventory can involve financing, storage, insurance, and other carrying costs.
If those costs dominate the benefits of owning inventory now, deferred futures can trade above nearby contracts. That upward-sloping structure is commonly called contango.
CME Group notes that storage, financing, and insurance can contribute to contango in physically delivered markets.
The exact relationship varies by product, so do not transfer one commodity's carry assumptions to another.
Scarcity and convenience can make nearby contracts more expensive
When immediate inventory is especially valuable, nearby contracts can trade above deferred contracts.
That downward-sloping structure is commonly called backwardation.
One reason is convenience yield: the economic benefit of having physical inventory available now, such as keeping production running during tight supply.
Backwardation does not guarantee prices will rise. It describes relative prices across maturities at one observation time.
Seasonality and expectations can bend the curve
Some markets have predictable seasonal demand or supply patterns.
Heating demand, crop cycles, maintenance schedules, inventories, funding conditions, and expected policy or economic changes can affect different delivery months differently.
That is why a futures curve can be smooth, steep, flat, inverted, or kinked instead of moving as one price.
Roll yield, contango, and backwardation explains what happens when exposure is moved between those months.
Worked example: same market, three different prices
Assume a market has June futures at 98.40, September at 100.10, and December at 101.25.
The September-minus-June spread is 100.10 - 98.40 = 1.70.
The December-minus-September spread is 101.25 - 100.10 = 1.15.
The December-minus-June difference is 2.85, which also equals 1.70 + 1.15.
These numbers describe the curve at one moment. They do not prove that any month is mispriced or predict the future spot price.
Calendar spreads explains how a trader can deliberately take exposure to changes in a month-to-month difference.
Compare months with a futures-curve checklist
- Confirm all quotes are for the same futures product - Record the exact month and year for each contract - Compare quotes from the same timestamp - Check whether the market is physically delivered or cash settled - Identify relevant carry, inventory, seasonality, and funding factors - Compare bid-ask spreads and liquidity before treating a curve difference as executable - Recheck the curve near roll and expiry periods [!TRYMARK] Futures-curve checkpoint At the September 18 close, record the three contract prices, timestamps, adjacent spreads, carry assumptions, and contract specifications before interpreting the curve.
A month-to-month price difference is a market relationship, not free profit by itself.
Common questions
Should all futures months eventually have the same price?
No. Different maturities can trade at different prices while time remains. As a given contract approaches its own settlement, its relationship to the relevant spot or final reference becomes more important.
Does a higher deferred price mean traders expect spot to rise?
Not necessarily. Carry costs and other structural factors can lift deferred prices. The curve is not a pure forecast of future spot prices.
Is contango the same as a positive calendar spread?
It depends on the spread convention. If deferred minus nearby is positive, that is consistent with an upward curve. Some platforms quote the opposite sign, so record the convention.
Can two nearby futures months move in opposite directions?
Yes. Changes in supply, demand, inventory, events, and liquidity can affect maturities differently. Calendar spreads exist because relative prices can change.