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

Soybean Meal (Non-Commercial)

13-Wk Max 117,689 165,985 9,637 23,417 -691
13-Wk Min 96,388 103,850 -7,478 -25,312 -55,904
13-Wk Avg 106,046 141,725 1,297 3,546 -35,679
Report Date Long Short Change Long Change Short Net Position Rate of Change (ROC) ℹ️ Open Int.
April 29, 2025 112,251 165,985 -2,518 20,240 -53,734 -73.47% 547,489
April 22, 2025 114,769 145,745 813 7,653 -30,976 -28.34% 604,633
April 15, 2025 113,956 138,092 -3,733 -25,312 -24,136 47.20% 605,379
April 8, 2025 117,689 163,404 9,637 1,052 -45,715 15.81% 623,643
April 1, 2025 108,052 162,352 7,682 12,704 -54,300 -10.19% 602,786
March 25, 2025 100,370 149,648 -4,930 12,141 -49,278 -53.00% 577,323
March 18, 2025 105,300 137,507 4,596 -8,405 -32,207 28.76% 560,198
March 11, 2025 100,704 145,912 691 -10,005 -45,208 19.13% 555,317
March 4, 2025 100,013 155,917 3,625 23,417 -55,904 -54.81% 555,333
February 25, 2025 96,388 132,500 -7,478 7,038 -36,112 -67.22% 548,207
February 18, 2025 103,866 125,462 1,779 9,408 -21,596 -54.62% 587,769
February 11, 2025 102,087 116,054 -1,072 12,204 -13,967 -1,921.27% 585,055
February 4, 2025 103,159 103,850 7,774 -16,043 -691 97.18% 593,828

Net Position (13 Weeks) - Non-Commercial

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

COT Interpretation for SOYBEAN MEAL

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 (Oversold)
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 Meal Trading Strategy Based on the COT Report (Retail & Market Investors)

This strategy outlines how retail traders and market investors can utilize the Commitment of Traders (COT) report to make informed decisions about trading Soybean Meal (SBM) futures contracts on the Chicago Board of Trade (CBT).

Disclaimer: Trading futures involves significant risk and is not suitable for all investors. This strategy is for informational purposes only and does not constitute financial advice. Always conduct your own due diligence and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results.

I. Understanding the COT Report for Soybean Meal:

The COT report, released weekly by the CFTC (Commodity Futures Trading Commission), provides a breakdown of the positions held by different market participants in the SBM futures market. We'll focus on three key groups:

  • Commercials (Hedgers): These are entities directly involved in the physical production, processing, or consumption of soybeans and SBM. They use futures to hedge price risk related to their business operations. Their positions are usually large and reflect their anticipation of future supply and demand dynamics in the physical market.
  • Large Speculators (Managed Money): These are typically hedge funds, commodity trading advisors (CTAs), and other institutional investors who trade futures for profit. They often follow technical analysis, macroeconomic trends, and fundamental research.
  • Small Speculators (Retail Traders): This category consists of individual traders and smaller firms who trade for speculative purposes.

Key Data Points to Watch:

  • Net Position: The difference between long and short positions for each group. A positive net position indicates a bullish outlook, while a negative net position suggests a bearish outlook.
  • Changes in Net Position: The week-over-week change in the net position. This indicates the direction and strength of each group's sentiment.
  • Percentage of Open Interest: The percentage of the total open interest (total number of outstanding contracts) held by each group. This highlights the relative influence of each group on the market.
  • Historical Context: Compare current COT data to historical trends over the past several years to identify potential extremes and turning points.

II. Trading Strategy Principles:

The core principle of this strategy is to align your trading decisions with the actions and sentiment of the Commercials (Hedgers). Since they have the most direct knowledge of the physical SBM market, their positions often reflect the most informed view of supply and demand dynamics.

A. Bullish Signals (Anticipating Higher SBM Prices):

  1. Commercials are Net Long or Reducing Short Positions: A large and increasing net long position among commercials, or a decreasing net short position, indicates that they expect prices to rise. This could be due to anticipated supply shortages, increased demand, or favorable crop conditions.
  2. Managed Money is Increasing Long Positions: While not as critical as commercial positioning, an increase in long positions by managed money can confirm the bullish sentiment. Look for this occurring after commercials have already signaled their bullish bias.
  3. Small Speculators are Short: Historically, small speculators tend to be on the wrong side of the market at extremes. When they are heavily short, it can be a contrarian indicator that a bullish reversal is imminent.

B. Bearish Signals (Anticipating Lower SBM Prices):

  1. Commercials are Net Short or Reducing Long Positions: A large and increasing net short position among commercials, or a decreasing net long position, suggests they expect prices to decline. This could be driven by anticipated oversupply, reduced demand, or unfavorable economic conditions.
  2. Managed Money is Increasing Short Positions: Again, confirm the trend with managed money. A significant increase in their short positions can reinforce the bearish outlook.
  3. Small Speculators are Long: If small speculators are heavily long, it can be a contrarian signal that a bearish move is likely.

C. Confirmation & Additional Factors:

  • Fundamental Analysis: Always combine COT analysis with fundamental factors such as weather patterns, planting progress, global demand, export data, and government reports (e.g., WASDE report from the USDA).
  • Technical Analysis: Use technical indicators (moving averages, trendlines, oscillators) to confirm entry and exit points. Look for confluence between COT signals and technical patterns.
  • Seasonality: Soybean meal prices often exhibit seasonal patterns related to planting and harvest cycles. Consider these patterns when interpreting COT data.

III. Trading Tactics for Retail & Market Investors:

Here's how to translate the COT analysis into specific trading strategies:

A. Entry Points:

  • Long Entry (Bullish):
    • Aggressive: Enter a long position when commercials start significantly reducing their short positions or increasing their long positions, especially if confirmed by managed money.
    • Conservative: Wait for a breakout above a key resistance level on the price chart, confirming the bullish COT signal.
  • Short Entry (Bearish):
    • Aggressive: Enter a short position when commercials start significantly reducing their long positions or increasing their short positions, with confirmation from managed money.
    • Conservative: Wait for a breakdown below a key support level on the price chart, confirming the bearish COT signal.

B. Exit Points (Profit Taking & Stop Losses):

  • Profit Targets: Set profit targets based on technical analysis (e.g., Fibonacci extensions, previous swing highs/lows) or fundamental analysis (e.g., anticipated price levels based on supply/demand).
  • Stop Losses: Place stop-loss orders to limit potential losses. Consider using:
    • Technical Stop: Place the stop below a recent swing low (for long positions) or above a recent swing high (for short positions).
    • ATR (Average True Range) Stop: Use a multiple of the ATR to determine the stop-loss level, providing a dynamic stop that adjusts to market volatility.
  • Trailing Stops: As the trade moves in your favor, consider using a trailing stop to lock in profits and protect against a sudden reversal.

C. Position Sizing:

  • Risk Management is Crucial: Never risk more than a small percentage of your trading capital on any single trade (typically 1-2%).
  • Adjust Position Size Based on Volatility: In highly volatile markets, reduce your position size to account for the increased risk.
  • Diversification: Don't put all your eggs in one basket. Diversify your portfolio across different commodities and asset classes.

IV. Example Trade Scenario:

Let's say the latest COT report shows the following:

  • Commercials: Have significantly reduced their net short position in SBM futures over the past few weeks. They are now close to a net long position.
  • Managed Money: Are starting to increase their long positions, confirming the trend.
  • Small Speculators: Are holding a relatively large net short position.
  • Fundamental Analysis: Weather reports indicate a potential drought in key soybean growing regions.
  • Technical Analysis: SBM prices have broken above a key resistance level on the chart.

Based on this information, you would consider entering a long position in SBM futures. You would set a stop-loss order below the recent swing low and a profit target based on Fibonacci extensions or other technical indicators.

V. Important Considerations:

  • Lagging Indicator: The COT report is a lagging indicator. It reflects past positions and may not always accurately predict future price movements.
  • Market Manipulation: While rare, there is a possibility of market manipulation that could distort COT data.
  • Data Revisions: The CFTC may revise previously released COT reports, so it's important to stay updated.
  • Focus on Trends, Not Single Data Points: Look for trends in the COT data over several weeks or months, rather than relying on a single week's report.
  • Combine with Other Indicators: The COT report should be used in conjunction with other forms of analysis (fundamental, technical, economic) to make well-informed trading decisions.

VI. Conclusion:

The COT report can be a valuable tool for understanding market sentiment and identifying potential trading opportunities in Soybean Meal futures. By carefully analyzing the positions of different market participants, particularly the commercials (hedgers), retail traders and market investors can improve their trading performance and manage risk more effectively. However, it's crucial to remember that the COT report is just one piece of the puzzle, and it should be used in conjunction with other forms of analysis to make informed trading decisions. Always prioritize risk management and consult with a qualified financial advisor before making any investment decisions. Good luck!