Back to COT Dashboard
Market Sentiment
Neutral (Overbought)
Based on the latest 13 weeks of non-commercial positioning data. ℹ️

Soybean Oil (Non-Commercial)

13-Wk Max 151,088 140,633 17,644 19,459 70,165
13-Wk Min 112,638 67,751 -13,663 -38,516 -23,349
13-Wk Avg 125,882 91,849 2,742 1,049 34,033
Report Date Long Short Change Long Change Short Net Position Rate of Change (ROC) ℹ️ Open Int.
April 29, 2025 151,088 80,923 17,644 7,870 70,165 16.18% 547,896
April 22, 2025 133,444 73,053 9,688 4,892 60,391 8.63% 560,911
April 15, 2025 123,756 68,161 -2,097 -8,982 55,595 14.13% 567,609
April 8, 2025 125,853 77,143 -1,890 -38,516 48,710 303.10% 577,958
April 1, 2025 127,743 115,659 10,459 -24,974 12,084 151.75% 597,282
March 25, 2025 117,284 140,633 -1,807 11,708 -23,349 -137.43% 596,420
March 18, 2025 119,091 128,925 3,030 11,318 -9,834 -536.09% 584,855
March 11, 2025 116,061 117,607 3,423 19,459 -1,546 -110.67% 566,507
March 4, 2025 112,638 98,148 -13,663 16,164 14,490 -67.30% 560,353
February 25, 2025 126,301 81,984 -10,676 7,656 44,317 -29.26% 548,988
February 18, 2025 136,977 74,328 12,090 4,609 62,649 13.56% 566,427
February 11, 2025 124,887 69,719 3,541 1,968 55,168 2.93% 564,386
February 4, 2025 121,346 67,751 5,898 470 53,595 11.27% 573,437

Net Position (13 Weeks) - Non-Commercial

Change in Long and Short Positions (13 Weeks) - Non-Commercial

COT Interpretation for SOYBEAN OIL

Comprehensive Guide to COT Reports for Agricultural Markets

Table of Contents

Introduction

The Commitment of Traders (COT) reports are particularly valuable for agricultural commodity markets, where a complex mix of producers, processors, speculators, and index funds creates unique market dynamics. This specialized guide focuses on applying COT analysis specifically to agricultural futures markets to gain trading and hedging advantages.

Agricultural markets present distinct characteristics in COT reports due to their seasonal production cycles, weather dependencies, global supply chain factors, and the essential nature of these commodities in the food supply chain. Understanding these nuances can provide significant analytical advantages.

Agricultural COT Reports: Key Characteristics

The CFTC provides specialized report formats that are particularly relevant for agricultural markets:

  1. Supplemental COT Report

    Created specifically for agricultural commodities to address the growing influence of index traders. This report separates index traders from the traditional commercial category, providing greater visibility into true commercial hedging versus passive long-only index investment.

  2. Disaggregated COT Report

    Particularly useful for agricultural markets as it separates:

    • Producer/Merchant/Processor/User: Actual agricultural industry participants
    • Swap Dealers: Often representing index exposure
    • Managed Money: Speculative funds and commodity trading advisors
    • Other Reportables: Other large traders
    • Non-Reportable Positions: Smaller traders
  3. Combined Futures and Options Report

    Important for agricultural markets where options strategies are frequently used by producers and processors for hedging.

Agricultural Markets Covered

The COT reports cover the following major agricultural futures markets:

Grains and Oilseeds

  • Corn (CBOT)
  • Soybeans (CBOT)
  • Wheat (CBOT, KCBT, MGEX)
  • Soybean Oil (CBOT)
  • Soybean Meal (CBOT)
  • Oats (CBOT)
  • Rough Rice (CBOT)
  • Canola (ICE)

Softs

  • Cotton (ICE)
  • Coffee (ICE)
  • Sugar (ICE)
  • Cocoa (ICE)
  • Orange Juice (ICE)

Livestock

  • Live Cattle (CME)
  • Feeder Cattle (CME)
  • Lean Hogs (CME)

Dairy

  • Class III Milk (CME)

Special Considerations for Agricultural Markets

  1. Seasonality

    Agricultural COT data must be interpreted within the context of seasonal production cycles:

    • Planting Seasons: Typically see increased hedging by producers
    • Growing Seasons: Weather concerns can drive speculative activity
    • Harvest Periods: Often see peak short hedging by producers
    • Storage Periods: Commercial positions shift from producers to processors and merchants
  2. USDA Reports Impact

    Major USDA reports cause significant position adjustments:

    • Prospective Plantings (March)
    • Acreage Report (June)
    • Crop Production Reports (Monthly)
    • WASDE Reports (Monthly)
    • Grain Stocks Reports (Quarterly)
  3. Weather Sensitivity

    Weather events can drive rapid position changes:

    • Drought conditions
    • Excessive rainfall
    • Early/late frosts
    • Global weather patterns (El Niño/La Niña)
  4. Global Production Cycles

    Unlike financial markets, agricultural markets must account for different hemispheric growing seasons:

    • North American harvest vs. South American harvest
    • Northern vs. Southern Hemisphere production windows

Understanding Trader Categories in Agricultural Markets

Producer/Merchant/Processor/User

Who they are: Farmers, grain elevators, food companies, feed manufacturers

Trading behavior:

  • Producers typically hedge by selling futures (short)
  • Processors typically hedge by buying futures (long)
  • Net position often reflects current point in seasonal cycle

Interpretation keys:

  • Increasing short positions ahead of harvest indicates producer hedging
  • Increasing long positions indicates processor price risk management
  • Extreme positions relative to seasonal norms may signal price turning points

Swap Dealers in Agricultural Markets

Who they are: Banks and dealers who provide commodity index exposure to clients

Trading behavior:

  • Predominantly long-biased due to index composition
  • Position changes often reflect fund flows rather than price views
  • Less responsive to short-term price movements

Interpretation keys:

  • Significant position changes may reflect institutional money flows
  • Generally less predictive for short-term price movements
  • Important for understanding overall market structure

Managed Money in Agricultural Markets

Who they are: Commodity Trading Advisors (CTAs), hedge funds, commodity pools

Trading behavior:

  • Typically trend-following
  • Responsive to technical signals and fundamental data
  • More volatile position changes than other categories

Interpretation keys:

  • Extreme positions often signal potential market turning points
  • Rapid position changes may precede significant price movements
  • Divergences between positions and price can be powerful signals

Seasonal Patterns in Agricultural COT Data

Corn

  • January-March: Processors often increase long positions
  • April-June: Producer short hedging increases with planting progress
  • July-August: Weather markets drive speculative positioning
  • September-November: Peak producer short hedging during harvest
  • December: Year-end position squaring

Soybeans

  • February-April: South American harvest impacts positioning
  • May-July: U.S. growing season uncertainty drives speculative activity
  • August-October: Producer hedging increases ahead of U.S. harvest
  • November-January: Processor buying often increases post-harvest

Wheat

  • March-May: Winter wheat condition reports impact positioning
  • June-August: Northern Hemisphere harvest creates heavy commercial short positioning
  • September-October: Planting intentions for new crop influence positions
  • November-February: Southern Hemisphere harvest impacts

Cotton

  • February-April: Planting intentions drive positioning
  • May-July: Growing season uncertainties
  • August-October: Harvest hedging peaks
  • November-January: Mill buying often increases

Live Cattle

Demonstrates less pronounced seasonality than crops

  • Feedlot placement cycles influence commercial hedging patterns
  • Seasonal demand patterns (grilling season, holidays) affect processor hedging

Index Fund Impact on Agricultural Markets

Understanding Index Involvement

  • Commodity indices like the S&P GSCI and Bloomberg Commodity Index maintain significant agricultural exposure
  • Index funds maintain predominantly long positions with periodic rebalancing
  • The Supplemental COT Report specifically identifies index trader positions

Key Considerations

  • Index positions tend to be less responsive to short-term price movements
  • "Roll periods" when indices shift positions between contract months can create temporary price pressure
  • Index participation has grown significantly since early 2000s, altering traditional market dynamics

How to Use Index Data

  • Major changes in index positions may signal institutional asset allocation shifts
  • Divergences between index positioning and price can identify potential opportunities
  • Understanding index roll schedules helps anticipate potential market impacts

Case Studies: Major Agricultural Markets

Corn Market

Commercial Positioning: Typically net short, with seasonal variation

Key COT Signals:

  • Commercials reducing short positions during price declines often precedes rallies
  • Managed Money net position extremes frequently coincide with price turning points
  • Commercial vs. Managed Money position gaps widening signals potential reversals

Soybean Market

Commercial Positioning: Varies greatly with global supply dynamics

Key COT Signals:

  • South American harvest periods create unique positioning patterns
  • Processor long positions increasing can signal anticipated demand strength
  • Spread positions between soybeans and products (meal, oil) provide crush margin insights

Live Cattle Market

Commercial Positioning: Processors often net short, feedlots net long

Key COT Signals:

  • Pack
  • Packer short coverage often precedes price rallies
  • Extreme speculative long positions frequently signal potential tops
  • Divergences between feeder and live cattle positioning provide spread opportunities

Trading Strategies for Agricultural Markets

  1. Harvest Pressure Strategy

    Setup: Monitor producer short hedging building before/during harvest

    Entry: Look for commercial short position peaks coinciding with price lows

    Exit: When commercial shorts begin covering and prices stabilize

    Markets: Particularly effective in grains and cotton

  2. Weather Premium Fade

    Setup: Identify extreme speculative positions during weather scares

    Entry: When managed money reaches historical position extremes

    Exit: As weather concerns normalize and positions revert

    Markets: Particularly effective in growing-season grain markets

  3. Commercial Signal Strategy

    Setup: Track commercial position changes relative to price

    Entry: When commercials significantly reduce net short positions during price declines

    Exit: When commercials begin increasing short positions again as prices rise

    Markets: Works across most agricultural commodities

  4. Processor Demand Strategy

    Setup: Monitor processor long positions for signs of anticipated demand

    Entry: When processor longs increase significantly during price weakness

    Exit: When prices rise to reflect the improved demand outlook

    Markets: Particularly effective in processing crops like soybeans, cotton, and cattle

  5. Commercial/Speculator Divergence Strategy

    Setup: Identify growing gaps between commercial and speculative positioning

    Entry: When the gap reaches historical extremes

    Exit: When the gap begins to narrow and price confirms

    Markets: Applicable across all agricultural markets

Combining COT Data with Fundamental Analysis

USDA Reports

  • Compare COT positioning changes before and after major USDA reports
  • Look for confirmation or divergence between report data and position adjustments
  • Monitor commercial reaction to reports for insight into industry interpretation

Crop Progress and Condition

  • Weekly crop condition reports often drive speculative positioning
  • Commercial reaction to condition changes can provide valuable trading signals
  • Divergences between conditions and positioning may identify mispriced markets

Global Supply and Demand Factors

  • International crop production changes drive positioning in globally traded markets
  • Export sales reports influence commercial hedging activities
  • Currency movements impact relative positioning in internationally traded commodities

Integrating Seasonal Fundamentals

  • Compare current positioning to historical seasonal patterns
  • Identify when positions are abnormal for the current point in the season
  • Use seasonal tendencies to anticipate upcoming position changes

Common Pitfalls and How to Avoid Them

  1. Ignoring Seasonality

    Pitfall: Interpreting position levels without seasonal context

    Solution: Always compare current positions to historical seasonal norms

    Example: Producer short positions naturally increase during harvest, not necessarily bearish

  2. Overlooking Contract Roll Impacts

    Pitfall: Misinterpreting position changes during index roll periods

    Solution: Be aware of standard roll schedules for major indices

    Example: Apparent commercial selling during roll periods may be temporary technical flows

  3. Misunderstanding Report Categories

    Pitfall: Not recognizing the nuances between different COT report formats

    Solution: Use the Supplemental and Disaggregated reports for better clarity

    Example: Index fund positions in Legacy reports can distort true commercial hedger activity

  4. Reacting to Single-Week Changes

    Pitfall: Overemphasizing one week's position changes

    Solution: Focus on multi-week trends and significant position changes

    Example: Weather-driven temporary position adjustments vs. fundamental trend changes

  5. Neglecting Spread Positions

    Pitfall: Focusing only on outright positions, missing spread implications

    Solution: Monitor spreading activity, especially in related markets

    Example: Soybean/corn spread positions can provide insight into acreage competition

Resources for Agricultural COT Analysis

Specialized Data Services

  • AgResource Company: Provides COT analysis specific to agricultural markets
  • Hightower Report: Offers regular COT commentary for agricultural commodities
  • Brugler Marketing: Features agricultural-focused COT interpretation

Software Tools

  • Commodity Research Bureau (CRB): Offers historical COT data visualization for agricultural markets
  • DTN ProphetX: Includes agricultural COT analysis tools
  • AgriCharts: Provides specialized agricultural market data including COT information

Educational Resources

  • Agricultural Extension Services: Many offer educational materials on hedging and market analysis
  • CME Group: Provides educational content specific to agricultural markets
  • ICE Exchange: Offers resources for soft commodity trading and analysis

Government Resources

  • USDA ERS (Economic Research Service): Provides contextual market analysis
  • CFTC Agricultural Advisory Committee: Publishes recommendations and analysis
  • USDA AMS (Agricultural Marketing Service): Offers complementary market data

© 2025 - This guide is for educational purposes only and does not constitute financial advice. Agricultural markets involve significant risk, and positions should be managed according to individual risk tolerance and objectives.

Market Neutral (Overbought)
Based on the latest 13 weeks of non-commercial positioning data.
📊 COT Sentiment Analysis Guide

This guide helps traders understand how to interpret Commitments of Traders (COT) reports to generate potential Buy, Sell, or Neutral signals using market positioning data.

🧠 How It Works
  • Recent Trend Detection: Tracks net position and rate of change (ROC) over the last 13 weeks.
  • Overbought/Oversold Check: Compares current net positions to a 1-year range using percentiles.
  • Strength Confirmation: Validates if long or short positions are dominant enough for a signal.
✅ Signal Criteria
Condition Signal
Net ↑ for 13+ weeks AND ROC ↑ for 13+ weeks AND strong long dominance Buy
Net ↓ for 13+ weeks AND ROC ↓ for 13+ weeks AND strong short dominance Sell
Net in top 20% of 1-year range AND net uptrend ≥ 3 Neutral (Overbought)
Net in bottom 20% of 1-year range AND net downtrend ≥ 3 Neutral (Oversold)
None of the above conditions met Neutral
🧭 Trader Tips
  • Trend traders: Follow Buy/Sell signals when all trend and strength conditions align.
  • Contrarian traders: Use Neutral (Overbought/Oversold) flags to anticipate reversals.
  • Swing traders: Use sentiment as a filter to increase trade confidence.
Example:
Net positions rising, strong long dominance, in top 20% of historical range.
Result: Neutral (Overbought) — uptrend may be too crowded.
  • COT data is delayed (released on Friday, based on Tuesday's positions) - it's not real-time.
  • Combine with price action, FVG, liquidity, or technical indicators for best results.
  • Use percentile filters to avoid buying at extreme highs or selling at extreme lows.

Soybean Oil Trading Strategy Based on COT Report Analysis (for Retail Traders and Market Investors)

This strategy leverages the Commitment of Traders (COT) report to identify potential trends and reversals in the Soybean Oil market traded on the Chicago Board of Trade (CBT). It's designed for both retail traders and market investors, but the risk tolerance and time horizon should be adjusted accordingly.

I. Understanding the COT Report

The COT report, released weekly by the CFTC (Commodity Futures Trading Commission), details the positions held by different categories of traders in the futures market. Understanding these categories and their implications is crucial:

  • Commercials (Hedgers): These are typically companies directly involved in the production, processing, or consumption of soybean oil. They use futures contracts primarily to hedge against price fluctuations in the physical market. Their positioning often reflects underlying supply and demand fundamentals. We assume their aggregate positioning is net short.

  • Non-Commercials (Speculators): These are large institutional investors like hedge funds, pension funds, and commodity trading advisors (CTAs). They trade primarily for profit and often follow trends.

  • Non-Reportable Positions (Small Traders): This category represents smaller retail traders. Their positions are not individually reported, and their collective influence is generally less significant than the other two groups.

II. Key COT Metrics and Interpretations

  1. Net Positions: The difference between long and short positions for each category. A positive net position indicates a bullish sentiment, while a negative net position suggests a bearish outlook. For example, a large net short position by Commercials suggests they anticipate stable or decreasing prices.

  2. Changes in Net Positions: Tracking the week-over-week changes in net positions provides insights into evolving market sentiment. Pay particular attention to changes in Commercials and Non-Commercials positions.

  3. Historical Context: Compare current net positions to historical levels. Are commercials at an extreme net short position compared to the past year? This could suggest potential for a price increase.

  4. Spreads Between Commercials and Non-Commercials: Divergence between these groups can signal potential reversals. For instance:

    • Bullish Signal: Commercials decrease their net short positions (becoming less bearish) while Non-Commercials increase their net long positions (becoming more bullish).
    • Bearish Signal: Commercials increase their net short positions (becoming more bearish) while Non-Commercials decrease their net long positions (becoming less bullish).

III. Trading Strategy: Trend Following and Contrarian Approaches

This strategy uses a combination of trend-following and contrarian elements, adapting to the specific behavior of each trader category in the COT report.

A. Trend Following (Following Non-Commercials):

  • Signal: A sustained increase in Non-Commercials' net long positions, accompanied by rising soybean oil prices.
  • Action: Initiate long positions in soybean oil futures or options. Consider using a smaller contract size to manage risk.
  • Stop-Loss: Place a stop-loss order below a recent swing low or a key support level.
  • Profit Target: Set a profit target based on technical analysis (e.g., Fibonacci extensions, resistance levels) or a multiple of the risk taken.
  • COT Confirmation: Continuously monitor the COT report. A weakening of Non-Commercials' bullish sentiment (slowing down or reversing their net long positions) should trigger a reassessment of the trade.

B. Contrarian Strategy (Fading Extremes in Commercials):

  • Signal: Commercials reach an extreme net short position relative to historical averages, combined with signs of price exhaustion (e.g., overbought conditions, bearish candlestick patterns). This suggests they are heavily hedging against price decreases. At some point, they will reduce their net short positions.
  • Action: Initiate long positions in soybean oil futures or options.
  • Stop-Loss: Place a stop-loss order below a recent swing low or a key support level.
  • Profit Target: Set a profit target based on technical analysis or aiming for a reversion to the mean (average historical net short position of Commercials).
  • COT Confirmation: Monitor the Commercials' behavior. Look for them to start reducing their net short positions, confirming the potential for a price reversal.

IV. Risk Management

  • Position Sizing: Never risk more than 1-2% of your trading capital on a single trade. Adjust position sizes according to your risk tolerance and account size. Soybean Oil contracts are large (60,000 lbs), so consider using mini-contracts or options strategies to reduce capital outlay.
  • Stop-Loss Orders: Always use stop-loss orders to limit potential losses.
  • Diversification: Don't put all your eggs in one basket. Diversify your portfolio across different commodities and asset classes.
  • Leverage: Use leverage cautiously. While it can amplify profits, it can also magnify losses. Understand the margin requirements and associated risks of trading soybean oil futures.

V. Integrating Technical and Fundamental Analysis

The COT report should be used in conjunction with other forms of analysis:

  • Technical Analysis: Use chart patterns, moving averages, trend lines, and other technical indicators to identify entry and exit points, support and resistance levels, and potential price targets.
  • Fundamental Analysis: Consider factors that affect soybean oil supply and demand, such as weather conditions, crop reports, government policies, and global economic trends.
  • Seasonality: Soybean oil prices often exhibit seasonal patterns. Research historical price movements to identify potential trading opportunities.

VI. Options Strategies (For Reduced Capital Outlay and Defined Risk)

Consider using options strategies to gain exposure to soybean oil with lower capital requirements and defined risk:

  • Buying Call Options: If you're bullish on soybean oil, buying call options allows you to participate in potential upside gains while limiting your risk to the premium paid.
  • Buying Put Options: If you're bearish on soybean oil, buying put options allows you to profit from potential downside moves while limiting your risk to the premium paid.
  • Vertical Spreads: Combine call or put options with different strike prices to create defined-risk and defined-profit potential strategies.

VII. Monitoring and Adjusting the Strategy

  • Regular COT Report Review: Analyze the COT report every week as soon as it's released to stay informed about changes in trader positioning.
  • Market Volatility: Adjust your position sizes and stop-loss levels based on market volatility.
  • Evolving Market Conditions: Be prepared to adapt your strategy as market conditions change. The relationship between COT data and price movements may not be consistent over time.

VIII. Important Considerations

  • Lagging Indicator: The COT report is a lagging indicator, meaning it reflects past market activity. It should be used in conjunction with other indicators and analysis techniques.
  • Manipulation: While less common, large players can attempt to manipulate the market, impacting the validity of COT-based signals.
  • Market Sentiment: Be aware of the overall market sentiment and how it might influence soybean oil prices.
  • Due Diligence: This strategy is for educational purposes only and should not be considered financial advice. Conduct thorough research and consult with a qualified financial advisor before making any trading decisions.

Example Scenario:

Let's say the COT report shows that Non-Commercials have been steadily increasing their net long positions in soybean oil over the past few weeks, and soybean oil prices have been rising. This suggests a bullish trend driven by speculative buying.

  1. Trend Following: You might consider initiating a long position in soybean oil futures (perhaps a micro contract).
  2. Risk Management: Place a stop-loss order below the recent swing low.
  3. Profit Target: Set a profit target based on a Fibonacci extension of the recent price move.
  4. COT Monitoring: Continue to monitor the COT report. If Non-Commercials begin to decrease their net long positions, it could be a sign that the bullish trend is weakening, and you should consider reducing or closing your position.

Conclusion:

By understanding the COT report and incorporating it into a well-defined trading strategy, retail traders and market investors can gain valuable insights into the soybean oil market. However, it's crucial to remember that no trading strategy guarantees profits, and careful risk management is essential for long-term success. Always prioritize education, continuous learning, and adapting your approach to the ever-changing dynamics of the commodity markets.