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

Live Cattle (Non-Commercial)

13-Wk Max 200,105 82,975 20,466 11,007 123,646
13-Wk Min 145,310 53,725 -33,016 -17,090 90,016
13-Wk Avg 173,308 67,683 -2,105 -873 105,624
Report Date Long Short Change Long Change Short Net Position Rate of Change (ROC) ℹ️ Open Int.
April 29, 2025 174,783 71,753 15,031 11,007 103,030 4.06% 357,066
April 22, 2025 159,752 60,746 14,442 7,021 99,006 8.10% 341,123
April 15, 2025 145,310 53,725 -21,779 -5,644 91,585 -14.98% 328,396
April 8, 2025 167,089 59,369 -33,016 -17,090 107,720 -12.88% 357,846
April 1, 2025 200,105 76,459 6,141 482 123,646 4.80% 405,914
March 25, 2025 193,964 75,977 20,466 5,904 117,987 14.08% 401,304
March 18, 2025 173,498 70,073 12,759 6,669 103,425 6.26% 372,760
March 11, 2025 160,739 63,404 3,002 -4,317 97,335 8.13% 357,600
March 4, 2025 157,737 67,721 -10,327 889 90,016 -11.08% 355,782
February 25, 2025 168,064 66,832 -4,600 2,439 101,232 -6.50% 363,192
February 18, 2025 172,664 64,393 -7,215 -2,062 108,271 -4.54% 362,698
February 11, 2025 179,879 66,455 -19,535 -16,520 113,424 -2.59% 367,803
February 4, 2025 199,414 82,975 -2,736 -131 116,439 -2.19% 386,168

Net Position (13 Weeks) - Non-Commercial

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

COT Interpretation for LIVE CATTLE

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
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.

Trading Strategy for Live Cattle Based on the COT Report (Retail Traders & Market Investors)

This strategy combines the insights of the Commitment of Traders (COT) report with fundamental and technical analysis to develop a comprehensive trading approach for Live Cattle futures contracts. It is designed for both retail traders and market investors, acknowledging the varying levels of risk tolerance and time commitments.

I. Understanding the Commitment of Traders (COT) Report

The COT report, published weekly by the CFTC (Commodity Futures Trading Commission), provides a breakdown of open interest in futures markets. It categorizes market participants into three main groups:

  • Commercials (Hedgers): These are entities that use futures contracts to hedge their underlying business risk. In Live Cattle, this primarily includes ranchers, meatpackers, and feedlot operators. They are generally considered the "smart money" as they have a strong understanding of supply and demand fundamentals.
  • Non-Commercials (Large Speculators): These are large institutional investors like hedge funds, commodity trading advisors (CTAs), and pension funds who trade for profit. They often follow trend-following strategies and can amplify market movements.
  • Non-Reportable Positions (Small Speculators): This category includes small retail traders who do not meet the reporting requirements. Their positions are considered to be less influential in the overall market direction.

Key COT Data Points to Analyze:

  • Net Position: The difference between long and short positions for each category.
  • Changes in Net Positions: The week-over-week change in each category's net position.
  • Historical Context: Compare current COT data to historical levels (e.g., 1-year, 3-year, 5-year highs and lows). This helps identify potential overbought or oversold conditions.
  • Commercial Net Position: This is the most important factor of the COT report in the Live Cattle market. It often reveals the direction of the market.

II. Trading Strategy Components

This strategy combines COT analysis with fundamental factors and technical analysis to provide a robust framework for trading Live Cattle.

1. COT Signal Generation:

  • Commercials (Hedgers) as a Leading Indicator: Focus on the net position of Commercials (Hedgers).

    • Bullish Signal: When Commercials decrease their net short position or increase their net long position, it suggests they anticipate higher prices and reduce their hedging activities.
    • Bearish Signal: When Commercials increase their net short position or decrease their net long position, it suggests they anticipate lower prices and increase their hedging activities.

  • Extreme Positioning: Look for instances where Commercials' net position is at historical extremes (e.g., near a multi-year high or low). This suggests a potential trend reversal.

  • Divergence: Compare the price action of Live Cattle with the COT data.

    • Bullish Divergence: Price makes a new low, but Commercials' net short position is decreasing (or long position increasing).
    • Bearish Divergence: Price makes a new high, but Commercials' net short position is increasing (or long position decreasing).

2. Fundamental Analysis:

  • Supply and Demand:
    • Cattle Inventory Reports: USDA's Cattle Inventory report (released twice a year) provides insights into the size of the cattle herd. A smaller herd generally leads to higher prices.
    • Cattle on Feed Reports: USDA's Cattle on Feed report (released monthly) tracks the number of cattle in feedlots. Higher numbers suggest increased future supply.
    • Slaughter Rates: Track weekly and monthly slaughter rates. Increased slaughter can temporarily depress prices, while decreased slaughter can boost prices.
    • Weather Conditions: Drought, heatwaves, or extreme cold can impact grazing conditions, cattle health, and feed costs, ultimately affecting supply.
  • Demand Factors:
    • Beef Consumption: Monitor consumer demand for beef, which is influenced by economic conditions, dietary trends, and competing protein sources (pork, poultry).
    • Export Demand: Track beef exports to key markets like Japan, South Korea, and Mexico. Strong export demand supports prices.
    • Seasonality: Live Cattle prices often exhibit seasonal patterns. Demand tends to be higher during grilling season (summer) and lower during winter months.
  • Input Costs:
    • Corn Prices: Corn is a major feed ingredient. Higher corn prices increase the cost of feeding cattle, potentially reducing profitability and impacting production decisions.
    • Hay and Pasture Conditions: Monitor hay and pasture conditions, particularly during drought-prone areas. Poor conditions can increase feed costs and reduce cattle weights.

3. Technical Analysis:

  • Trend Identification: Use moving averages (e.g., 50-day, 200-day) to identify the overall trend.
  • Support and Resistance Levels: Identify key support and resistance levels based on past price action.
  • Chart Patterns: Look for chart patterns like head and shoulders, double tops/bottoms, triangles, and flags.
  • Momentum Indicators: Use indicators like RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence) to gauge momentum and identify potential overbought or oversold conditions.
  • Volatility: Measure volatility with ATR (Average True Range) or Bollinger Bands to adjust position sizing and risk management.

III. Trading Rules & Execution:

  1. Entry Signal:
    • COT Confirmation: A bullish or bearish COT signal should align with the overall trend identified through technical analysis and supported by fundamental factors. For example, a bullish COT signal (decreasing Commercials' net short) combined with a break above a key resistance level and positive fundamental news (strong export demand) would create a strong entry signal.
  2. Stop-Loss Placement:
    • Place stop-loss orders below the recent swing low (for long positions) or above the recent swing high (for short positions). Consider the ATR to account for volatility when setting stop-loss levels.
  3. Profit Target:
    • Identify potential profit targets based on previous resistance levels (for long positions) or support levels (for short positions). Use Fibonacci extensions or retracements to project potential price targets.
    • Consider trailing stops to lock in profits as the trade moves in your favor.
  4. Position Sizing:
    • Use a risk-based position sizing strategy. Risk no more than 1-2% of your total trading capital on any single trade. Adjust position size based on the distance between your entry price and stop-loss level.
  5. Trade Management:
    • Monitor the COT report weekly and adjust your positions accordingly.
    • Stay informed about fundamental developments in the Live Cattle market.
    • Be prepared to adjust your stop-loss and profit targets as the market evolves.

IV. Risk Management

  • Leverage: Live Cattle futures offer significant leverage. Use leverage cautiously and understand the potential for losses.
  • Market Volatility: Live Cattle can be a volatile market. Be prepared for price swings and unexpected events.
  • Margin Requirements: Understand the margin requirements for Live Cattle futures and ensure you have sufficient capital to cover potential losses.
  • Emotional Discipline: Stick to your trading plan and avoid making impulsive decisions based on fear or greed.

V. Example Trade Scenario

  1. COT Data: The weekly COT report shows that Commercials have been steadily decreasing their net short position in Live Cattle for the past several weeks, reaching a multi-year low.
  2. Fundamental Analysis: USDA reports strong export demand for U.S. beef, and forecasts indicate favorable weather conditions for grazing. Corn prices are stable, keeping feed costs in check.
  3. Technical Analysis: Live Cattle prices have broken above a key resistance level (identified through trendlines and previous highs) and the 50-day moving average is above the 200-day moving average, indicating an uptrend.
  4. Trade Decision: Based on the confluence of bullish COT data, positive fundamental factors, and a confirmed uptrend, you decide to enter a long position in Live Cattle futures.
  5. Execution: You place a buy order at the market price, with a stop-loss order placed below the recent swing low and a profit target set at the next key resistance level. You use a risk-based position sizing strategy, risking no more than 1% of your trading capital on the trade.
  6. Trade Management: You monitor the COT report weekly and stay informed about fundamental developments in the Live Cattle market. If the market moves in your favor, you may consider trailing your stop-loss order to lock in profits.

VI. Important Considerations

  • Data Latency: The COT report is released weekly, so the information is not real-time.
  • Market Complexity: The Live Cattle market is influenced by a wide range of factors, making it difficult to predict price movements with certainty.
  • Backtesting: Before implementing this strategy with real money, thoroughly backtest it using historical data to assess its performance and identify potential weaknesses.
  • Adaptation: Continuously monitor the market and adjust your strategy as needed based on changing conditions.
  • Education: Continuously learn about the Live Cattle market, the COT report, and trading strategies. Consider taking courses or reading books on these topics.

VII. Disclaimer

This trading strategy is for educational purposes only and should not be considered investment advice. Trading futures involves significant risk of loss. It is essential to consult with a qualified financial advisor before making any investment decisions.

By combining the insights from the COT report with fundamental and technical analysis, retail traders and market investors can develop a more informed and potentially profitable trading strategy for Live Cattle futures. Remember to prioritize risk management and adapt your approach as market conditions evolve. Good Luck!