Contango and Backwardation in Common Usage
Investment professionals on financial TV channels and in newspapers colloquially refer to upward trends in futures prices as contango and downwards trends in futures prices as backwardation.
Contango and Backwardation in Economic Theory
In economic theory regarding Backwardation and Contango, associated with John Maynard Keyns and John Hicks, for Contango to exist, expected spot prices (someday in the future) have to be lower than current futures prices for the same future moments, and reverse has to apply for Backwardation. Thus whether we have a contango or bacwardation depends on an arbitrary forward estimate of spot prices.
For example, if we estimate that today's spot price, price at which a physical commodity is trading today, is an expected spot price someday in the future, and we see an upward trend in a commodity strip (series of future contracts prices), we see a contango. On the other hand, if the futures prices in a commodity strip trending upwards are considered unbiased estimates of the expected future spot prices, meaning they are equal, there is no Contango or Backwardation to speak of. By the way, upward trend of estimates may be a result of storage expenses.