Contango is a situation in the price action of the commodities market where the futures forward price of a commodity is more than the spot price expected of the futures contract at its maturity and delivery date. The opposite condition in the futures market to contango is called backwardation. The commodity market is in backwardation whenever the futures contract current market price is lower than the spot price expected for a specific commodity. Backwardation is favorable for holders of a commodity who have long positions since they want the futures price to rise to the level of the current spot price. During a ... (full story)