Feeder Cattle COT Report for the week ending 2026-03-13

Executive summary

This week's report reveals a significant risk-off tone in the Feeder Cattle market, characterized by a sharp drop in open interest and a notable reduction in speculative length. Managed Money trimmed their net long position, primarily through long liquidation and a massive unwind of spreading strategies. Concurrently, Commercial Producers and Merchants increased their short hedges, suggesting they are using current price levels to protect against a potential downturn. The overall picture is one of fading bullish conviction and profit-taking after a period of speculative buying.

Positioning

• Managed Money (Funds): The net long position for this speculative category decreased slightly to +18,712 contracts (24,653 long vs. 5,941 short). This is a pullback from the recent high of +19,634 contracts seen on February 27th. While still a historically strong bullish stance, the momentum has shifted towards net selling.
• Producer/Merchant (Commercials): This group, representing physical market participants, expanded their net short position to -6,535 contracts (8,911 long vs. 15,446 short). This is an increase in their net short from -5,554 contracts the prior week, indicating increased hedging activity.
• Swap Dealers: This category holds a net long position of +4,296 contracts (5,049 long vs. 753 short), which is a slight increase from the prior week.

Flows and week-over-week changes

The reporting week saw significant position adjustments across all major categories: - Managed Money: The primary driver was a substantial unwind of calendar spreads, which fell by 3,655 contracts. Outright long positions were reduced by 759 contracts, while shorts were also covered by 530 contracts. The net effect was a reduction in their overall bullish bet. - Producer/Merchant: Commercials displayed clear bearish behavior, reducing longs by 150 contracts while adding a significant 831 new short contracts. This increased their net short position by 981 contracts, signaling a desire to lock in prices. - Other Reportables & Non-Reportables: These categories also saw major reductions in gross positioning, contributing to the overall decline in market participation. "Other Reportables" were net sellers, while the smaller, non-reportable (retail) traders were net buyers, primarily by covering 812 short contracts.

Commercials vs speculators

The classic market structure of speculators being net long against commercial net shorts remains firmly in place. However, the flows this week show a divergence in opinion. - Speculators (Managed Money): The reduction in the net long position indicates profit-taking or a decrease in bullish conviction. The liquidation was led by closing existing long positions rather than initiating aggressive new shorts. - Commercials (Producers): The increase in short hedging by over 800 contracts suggests that those with physical exposure to the cattle market view current or recent prices as favorable for selling. This commercial selling can act as a headwind for further price rallies.

Open interest and participation

• Open Interest: Total market participation saw a steep decline, with Open Interest falling by 4,763 contracts to 72,436. This is the lowest level in the provided dataset and a sharp drop from the peak of over 79,000 contracts in early February. A drop in open interest alongside speculative long liquidation is often a bearish technical signal.
• Concentration: The market shows moderate concentration. The four largest traders control 13.6% of the total short side, while the eight largest control 19.0%. This is slightly higher than the concentration on the long side (9.6% for the top 4, 17.2% for the top 8).

Price context

Price series data was not provided for the reporting period. Therefore, a direct correlation of positioning changes with price action cannot be made. However, the observed positioning changes—particularly the significant drop in open interest and the liquidation of speculative longs—are typically associated with a price correction or a period of consolidation following a market rally.

Risks and watchpoints

• Risk of Continued Long Liquidation: Managed Money still holds a substantial net long position of +18,712 contracts. Should market sentiment continue to deteriorate, there is a large volume of positions that could be sold, potentially accelerating any downward price pressure.
• Producer Selling as Resistance: The willingness of commercials to increase hedges at these levels suggests a potential price ceiling. Continued heavy selling from this group could absorb speculative buying and cap rallies.
• Spreading Unwind: The large-scale exit from Managed Money spread positions (-3,655 contracts) is a key development. This can signal a reduction in arbitrage opportunities between contract months and may lead to higher outright volatility as traders shift to directional bets.
• Monitor Open Interest: A continued decline in open interest would confirm that capital is leaving the Feeder Cattle market, reinforcing a bearish outlook. A stabilization and subsequent increase in open interest would be required to signal a potential resumption of the prior trend.