Feeder Cattle Futures COT Report: Week Ending 2025-12-23

Executive summary

This report covers a single week of positioning data for Feeder Cattle futures. Speculators, led by Managed Money, hold a significant net long position, which was modestly extended this week. In contrast, Commercials (Producer/Merchants) remain net short, a typical hedging posture, but they notably reduced their short exposure during the period. Open interest saw a moderate increase, indicating new capital entering the market. The primary limitation of this analysis is the absence of prior weeks' data, which prevents an assessment of whether current positioning is at a historical extreme. Price data was also unavailable, precluding any correlation between positioning changes and market performance.

Positioning

As of December 23, 2025, the net positions for major reporting groups are as follows: * Managed Money: Net long +14,526 contracts (22,844 long vs. 8,318 short). This establishes them as the primary net long holders in the market. * Producer/Merchant: Net short -5,012 contracts (7,587 long vs. 12,599 short), reflecting their role as hedgers. * Swap Dealers: Net long +4,965 contracts (5,699 long vs. 734 short). * Nonreportable (Small Speculators): Net short -5,463 contracts (9,275 long vs. 14,738 short).

Without data from prior weeks, it is not possible to determine if these positions are stretched or represent a significant shift from recent trends.

Flows and week-over-week changes

The reporting week saw several key shifts in positioning: * Managed Money added to both sides of the market, increasing longs by 459 contracts and shorts by 300 contracts. This resulted in a minor increase to their net long position of +159 contracts. * Producer/Merchants were the most active group, significantly reducing their net short position. They added 285 long contracts while simultaneously cutting 453 short contracts, resulting in their net position becoming +738 contracts less short. * Swap Dealers increased their net long position by +121 contracts, driven by the addition of 135 new longs. * Other Reportables became more bearish, increasing their net short position by -747 contracts, primarily by adding 1,028 new short positions.

Commercials vs speculators

The classic divergence between commercials and speculators is evident in the Feeder Cattle market. * Speculators (Managed Money): Their large net long position (+14,526 contracts) indicates a strong bullish conviction on the direction of prices. The additions this week, though small, reinforce that sentiment. * Commercials (Producer/Merchant): Their net short position (-5,012 contracts) is consistent with producers hedging future production by selling futures. However, the significant short-covering this week (-453 short contracts) is a notable development. This action could suggest that producers see less immediate downside risk or are satisfying physical delivery obligations.

Open interest and participation

• Open Interest: Total open interest increased by 989 contracts to stand at 66,071. This rise, concurrent with a build in net speculative length and a reduction in commercial shorts, suggests new bullish capital entered the market.
• Participation: The market consists of 265 total reporting traders. Managed Money participation is concentrated, with just 22 traders holding the long side and 32 on the short side.
• Concentration: Position concentration is moderate. The largest 4 traders control 17.3% of gross long positions and 14.2% of gross short positions. The largest 8 traders control 25.5% and 22.9% of gross longs and shorts, respectively. This does not indicate an overly concentrated market.

Price context

Price series data was not provided for this reporting period. Therefore, it is not possible to correlate these positioning changes with market price action. We cannot determine if the new speculative longs were added into a price rally or if the commercial short-covering occurred during a market decline.

Risks and watchpoints

• Single Data Point: The most significant caveat is that this analysis is based on a single week's data. Without historical context, we cannot gauge the extremity of the current +14,526 contract net long held by Managed Money. A historically large long position could be a contrarian bearish signal, while a nascent one could signal further upside.
• Commercial Behavior: The reduction in the Producer/Merchant net short position is the most important development this week. Continued short-covering by this "smart money" group in subsequent reports would be a strong bullish signal for the market.
• Rising Open Interest: The increase in open interest validates the week's moves. A reversal in this trend, where open interest falls as positions are liquidated, would signal a potential loss of momentum.