This refers to a scenario in financial markets wherein the price of a commodity in the futures market is higher than the price at which the commodity is currently available for sale in the spot market. This is attributed to various reasons. One that is often cited is that buyers believe that the price of the commodity could be higher in the future, perhaps due to a shortage, and hence want to hedge against it. A commodity speculator can favourably exploit the situation if he can buy the commodity at a lower price in the spot market and store it cheaply, which will allow him to earn sufficient arbitrage profits.
