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Based on the latest 13 weeks of non-commercial positioning data. ℹ️

Feeder Cattle (Non-Commercial)

13-Wk Max 43,512 21,291 2,755 2,356 22,370
13-Wk Min 32,630 16,436 -6,741 -2,216 15,210
13-Wk Avg 36,933 19,164 -177 -81 17,769
Report Date Long Short Change Long Change Short Net Position Rate of Change (ROC) ℹ️ Open Int.
April 29, 2025 35,726 19,125 1,280 2,356 16,601 -6.09% 68,916
April 22, 2025 34,446 16,769 1,816 333 17,677 9.16% 66,533
April 15, 2025 32,630 16,436 -3,082 -1,725 16,194 -7.73% 68,812
April 8, 2025 35,712 18,161 -6,741 -1,922 17,551 -21.54% 70,431
April 1, 2025 42,453 20,083 -1,059 -1,208 22,370 0.67% 79,252
March 25, 2025 43,512 21,291 2,489 427 22,221 10.23% 83,234
March 18, 2025 41,023 20,864 2,755 878 20,159 10.27% 84,963
March 11, 2025 38,268 19,986 2,020 272 18,282 10.57% 78,243
March 4, 2025 36,248 19,714 1,759 435 16,534 8.70% 79,402
February 25, 2025 34,489 19,279 -449 929 15,210 -8.31% 79,422
February 18, 2025 34,938 18,350 931 -78 16,588 6.48% 78,456
February 11, 2025 34,007 18,428 -2,665 -2,216 15,579 -2.80% 79,435
February 4, 2025 36,672 20,644 -1,353 463 16,028 -10.18% 81,808

Net Position (13 Weeks) - Non-Commercial

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

COT Interpretation for FEEDER 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 Sell
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.

Okay, let's craft a comprehensive trading strategy for Feeder Cattle based on the Commitments of Traders (COT) report, tailored for retail traders and market investors. This strategy will focus on identifying potential shifts in market sentiment and using the COT report to confirm or contradict your existing analysis.

I. Understanding Feeder Cattle and the COT Report

  • Feeder Cattle Basics: Feeder cattle are young steers or heifers that are ready to be fed to increase their weight and size for slaughter. Prices are influenced by factors like grain prices (feed costs), weather patterns, demand for beef, and overall economic conditions. Feeder cattle futures contracts represent the price of feeder cattle at a future delivery date.
  • COT Report Overview: The Commitments of Traders (COT) report is released weekly by the Commodity Futures Trading Commission (CFTC). It breaks down the open interest (total number of outstanding contracts) into different categories of traders. The primary categories we'll focus on are:
    • Commercials (Hedgers): These are entities that use the futures market to hedge their physical commodity risk (e.g., cattle ranchers, feedlots, meat processors). They are generally considered the "smart money" in the market because they have direct knowledge of supply and demand fundamentals. They are typically net short in the market as they sell futures to lock in prices for their future production.
    • Large Speculators (Managed Money): These are typically hedge funds, commodity trading advisors (CTAs), and other large institutions that trade futures for profit. They are trend followers and often react to market momentum.
    • Small Speculators (Retail Traders): This category includes individual traders and smaller funds. Their positions are often considered lagging indicators of market sentiment.

II. Key COT Report Metrics for Feeder Cattle

We'll focus on the following metrics and how to interpret them:

  • Net Position: This is the difference between the number of long contracts and short contracts held by each category of trader. A positive net position means a trader is net long (bullish), while a negative net position means they are net short (bearish).
  • Changes in Net Position: Tracking the week-over-week or multi-week changes in the net positions is crucial. Significant shifts in these positions can signal a change in market sentiment.
  • Commercial Hedgers Net Position: This is usually the most important indicator to follow. When Commercials are decreasing their shorts or increasing their long positions, it can mean that supply is tightening and they want to make sure they have enough cattle to fulfill future orders. Conversely, when Commercials are increasing their shorts, it can mean there is going to be excess supply and they are locking in prices.

III. Trading Strategy Based on COT Report

This strategy incorporates a combination of technical analysis, fundamental analysis, and COT report analysis.

A. Pre-Trade Analysis (Weekly/Daily)

  1. Fundamental Analysis:

    • Review Weekly Feeder Cattle Market Report: This report provides up-to-date information on slaughter rates, auction prices, and other key factors affecting feeder cattle supply and demand.
    • Grain Prices: Monitor corn and soybean prices, as these are major feed costs for cattle. Rising feed costs can negatively impact feeder cattle prices, and vice versa.
    • Weather: Pay attention to weather patterns in major cattle-producing regions. Droughts can reduce grazing land and increase feed costs, while favorable weather can boost production.
    • Economic Conditions: Overall economic health and consumer demand for beef play a significant role.

  2. Technical Analysis:

    • Price Charts: Analyze daily, weekly, and monthly charts of feeder cattle futures. Look for key support and resistance levels, trendlines, chart patterns (e.g., head and shoulders, double tops/bottoms), and moving averages.
    • Momentum Indicators: Use indicators like RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence), and stochastic oscillators to gauge the strength and direction of price momentum.
    • Volume: Observe trading volume, especially during breakouts or breakdowns. High volume confirms the move, while low volume suggests it may be a false signal.

  3. COT Report Analysis (Friday Afternoons - Release):

    • Download and Review the COT Report: Obtain the latest COT report from the CFTC website. Focus on the "Feeder Cattle" contract.
    • Commercials' Position: Analyze the commercials' net position. Are they becoming more bullish (decreasing their net short position) or more bearish (increasing their net short position)?
    • Large Speculators' Position: Note the large speculators' net position. Are they following the commercials, or are they moving in the opposite direction? Divergence between commercials and large speculators can be a warning sign.
    • Trend Confirmation/Contradiction: Does the COT report confirm or contradict your fundamental and technical analysis? This is critical.

B. Entry Signals

Here are a few scenarios and potential entry signals:

  1. Commercials and Price Agree (Confirmation):

    • Bullish Scenario:
      • Fundamental/Technical Analysis: Bullish signals (e.g., price breaking above resistance, positive economic outlook).
      • COT Report: Commercials are decreasing their net short position (becoming more bullish). Large speculators are also bullish.
      • Entry Signal: Consider a long entry on a pullback to a support level or a breakout above a recent high, with a stop-loss order below the support level.
    • Bearish Scenario:
      • Fundamental/Technical Analysis: Bearish signals (e.g., price breaking below support, negative economic outlook).
      • COT Report: Commercials are increasing their net short position (becoming more bearish). Large speculators are also bearish.
      • Entry Signal: Consider a short entry on a rally to a resistance level or a breakdown below a recent low, with a stop-loss order above the resistance level.

  2. Commercials and Price Disagree (Divergence - Potential Reversal):

    • Bullish Reversal Signal:
      • Fundamental/Technical Analysis: Bearish signals (e.g., downtrend). Price is oversold (RSI below 30).
      • COT Report: Commercials are significantly decreasing their net short position while price is still falling. This suggests they believe the market is undervalued. Large Speculators are heavily short and likely wrong.
      • Entry Signal: Consider a long entry on a break above a short-term downtrend line or a bullish reversal candlestick pattern (e.g., hammer, bullish engulfing) with a stop-loss below the low of the reversal pattern.
    • Bearish Reversal Signal:
      • Fundamental/Technical Analysis: Bullish signals (e.g., uptrend). Price is overbought (RSI above 70).
      • COT Report: Commercials are significantly increasing their net short position while price is still rising. This suggests they believe the market is overvalued. Large Speculators are heavily long and likely wrong.
      • Entry Signal: Consider a short entry on a break below a short-term uptrend line or a bearish reversal candlestick pattern (e.g., shooting star, bearish engulfing) with a stop-loss above the high of the reversal pattern.

C. Trade Management

  1. Stop-Loss Orders: Always use stop-loss orders to limit potential losses. Place the stop-loss order based on technical levels of support/resistance and your risk tolerance.
  2. Profit Targets: Set realistic profit targets based on technical levels, risk/reward ratio, and your trading plan. Consider using multiple profit targets to lock in partial profits along the way.
  3. Trailing Stops: As the trade moves in your favor, consider using a trailing stop-loss to protect your profits and allow the trade to run further.
  4. Monitoring: Continuously monitor the trade and adjust your stop-loss and profit targets as needed based on market conditions and new information. Keep an eye on the COT report updates.
  5. Scaling In/Out (Optional): Depending on your risk tolerance, you can consider scaling into a position gradually (adding to your position as it moves in your favor) or scaling out (taking partial profits as the trade reaches pre-defined levels).

D. Risk Management

  1. Position Sizing: Never risk more than 1-2% of your trading capital on any single trade. Adjust your position size based on your stop-loss distance and your account size.
  2. Leverage: Be extremely cautious with leverage. Feeder Cattle futures can be volatile, and excessive leverage can quickly lead to significant losses. Start with the smallest possible position size.
  3. Diversification: Don't put all your eggs in one basket. Diversify your trading portfolio across different commodities or asset classes.
  4. Emotional Control: Avoid emotional decision-making. Stick to your trading plan, and don't let fear or greed drive your actions.

IV. Example Trade Scenario

Let's say you are looking at Feeder Cattle futures in July.

  • Fundamental Analysis: You see reports of a potential drought in major cattle-producing regions, which could lead to higher feed costs and lower cattle weights. This is bearish.
  • Technical Analysis: The price has been in a downtrend for several weeks, and it's currently testing a key support level. RSI is approaching oversold levels.
  • COT Report: You see that Commercials have been steadily increasing their net short positions for the past few weeks, suggesting they expect prices to decline further. Large speculators are becoming increasingly bullish, indicating a disagreement.
  • Action: You decide to wait for a confirmed breakdown below the support level, and then you enter a short position with a stop-loss order above the support level. Your profit target is based on the next level of support. You continue to monitor the COT report and adjust your stop-loss as the trade moves in your favor.

V. Important Considerations and Cautions

  • Lagging Indicator: The COT report is a lagging indicator. It reflects positions held as of Tuesday of each week and is released on Friday afternoon. Market conditions can change significantly between Tuesday and Friday.
  • Confirmation, Not Prediction: The COT report should be used to confirm or contradict your existing analysis, not as a standalone prediction tool.
  • Context is Key: Interpret the COT report in the context of fundamental and technical analysis.
  • Data Errors: While rare, errors can occur in the COT report data.
  • Risk Tolerance: This strategy involves risk. Only trade with capital you can afford to lose.
  • Education: Continuously educate yourself about the feeder cattle market, the COT report, and trading strategies.
  • Backtesting: If possible, backtest this strategy (or variations of it) using historical data to see how it would have performed in the past. Remember, past performance is not indicative of future results.
  • Start Small: Begin with a demo account or small positions to test your strategy before risking significant capital.

VI. Additional Resources

  • CFTC Website: www.cftc.gov (for the COT report and other market information)
  • CME Group Website: www.cmegroup.com (for feeder cattle futures contract specifications and market data)
  • AgriBusiness News Outlets: Websites such as Farm Journal and Agri-Pulse provide key fundamental news and information.

VII. Disclaimer

This information is for educational purposes only and should not be considered financial advice. Trading futures involves significant risk of loss, and you should consult with a qualified financial advisor before making any trading decisions.

By following this comprehensive strategy and continuously learning and adapting, you can improve your chances of success in trading Feeder Cattle futures. Good luck!