Feeder Cattle COT Brief: Week Ending July 31, 2026

Executive summary

This report covers positioning in the Feeder Cattle futures market for the week ending July 31, 2026. The most significant development is the continued and aggressive reduction of the net long position held by Managed Money, which has now fallen to the lowest level in the provided dataset spanning back to late 2025. This long liquidation indicates a strong bearish shift in speculative sentiment. Concurrently, Commercial producers increased their net short hedging positions. Overall open interest saw a modest increase, suggesting new positions were established even as others were liquidated. The data points towards a market under pressure from both speculative selling and increased commercial hedging.

Positioning (net, extremes vs recent weeks)

• Managed Money: The net long position fell to +8,987 contracts (17,153 long vs. 8,166 short). This is a substantial decline from a net long position of +9,345 contracts the prior week and represents the smallest net long held by this group in the available historical data, which saw peaks above +21,000 contracts in April 2026.
• Producer/Merchant (Commercials): This group deepened their net short stance to -4,362 contracts (7,533 long vs. 11,895 short), compared to -3,156 contracts in the previous week. This is not an extreme short, but the increase is notable.
• Swap Dealers: Remained significantly net long at +7,069 contracts (8,128 long vs. 1,059 short), holding a position largely opposite to that of the Commercials and other reportable shorts.
• Other Reportables: Hold a very large net short position of -10,000 contracts, acting as a significant source of short-side liquidity.

Flows and week-over-week changes

The reporting week was characterized by significant speculative long liquidation and fresh commercial shorting. - Managed Money: Reduced their net long position by 358 contracts. This was driven by a substantial liquidation of gross longs (-889 contracts), which was only partially offset by covering of gross shorts (-531 contracts). This indicates profit-taking or capitulation from longs rather than aggressive new short selling. - Producer/Merchant: Increased their net short position by 1,206 contracts. The change was almost entirely due to the addition of new short hedges (+1,200 contracts), a bearish signal reflecting producers locking in prices. - Swap Dealers: Showed minimal change, with their net position shifting by only -11 contracts. - Non-reportable (Retail): This group added to both sides of the market, increasing their net short position from -1,479 to -1,700 contracts.

Commercials vs speculators

The classic divergence between Commercials and Speculators is clear and widening. - Speculators (Managed Money): Despite still being net long, the trend is one of rapid unwinding. Their long exposure has been more than halved from its peak earlier in the year, removing a key pillar of support for the market. - Commercials (Producer/Merchant): Are net short, as is typical for producers hedging future production. The week's activity, marked by the addition of 1,200 short contracts, shows a clear desire to hedge at current levels, suggesting they either see prices as favorable for selling or anticipate further downside. - Swap Dealers are the primary counterparty, holding a large net long of +7,069 contracts, effectively warehousing the risk being shed by producers.

Open interest and participation

• Open Interest: Total open interest increased slightly by 864 contracts to 66,369. This rise, occurring alongside the liquidation of speculative longs, suggests new participants entered the market, likely on the short side. Overall OI remains well below the highs near 80,000 contracts seen in February.
• Concentration: The concentration of positions among the largest traders shows a slight skew to the short side. The largest 4 traders account for 14.5% of the net short position versus 9.8% of the net long. For the largest 8 traders, the figures are 21.7% (short) and 17.3% (long), respectively. This indicates that the largest short positions are more concentrated than the largest long positions.

Price context

• Price series data was not provided for this reporting period.
• However, the positioning changes strongly imply a period of price weakness. The significant liquidation of longs by Managed Money (-889 contracts) and the addition of new short hedges by Producers (+1,200 contracts) are classic reactions to, and drivers of, a falling market.

Risks and watchpoints

• Speculative Exhaustion: The Managed Money net long position is at a multi-month low. This could signal that speculative selling is nearing exhaustion. A market devoid of speculative length can be sensitive to bullish news, potentially leading to a sharp short-covering rally.
• Continued Commercial Pressure: Watch for continued increases in producer shorting. If this hedging pressure persists, it will likely act as a significant headwind for prices.
• Swap Dealer Risk: Swap Dealers hold a substantial net long position. A continued price decline could force this group to reduce their exposure, which would add further selling pressure to the market. The sustainability of this large long position is a key watchpoint.