Live Cattle - Commitments of Traders (Week Ending 2026-02-13)

Executive summary

This week's report shows a significant pullback in bullish sentiment from speculators, primarily driven by long liquidation from the Managed Money category. Despite this reduction, their net long position remains historically elevated. The move coincided with a sharp drop in overall market participation, as open interest fell by over 10,000 contracts. Commercials (Producers/Merchants) remain heavily net short, consistent with their hedging activity, but slightly reduced their short exposure. The overall picture is one of profit-taking or risk reduction in a previously strong bullish trend, though the underlying positioning imbalance between large speculators and commercials persists.

Positioning

• Managed Money (Speculators): Net position decreased to +106,639 contracts. While this is down from last week's peak of +111,771 contracts (the high for the provided data period), it remains significantly above the levels seen in late December (+89,587). This group maintains a strong bullish bias.
• Producers/Merchants (Commercials): Net position is -132,737 contracts. This group continues to hold a massive net short position, typical for producers hedging future sales. Their net short position decreased slightly from last week's -135,174 contracts.
• Swap Dealers: Net position increased to a new recent high of +59,365 contracts. This group often provides liquidity and takes the other side of commercial hedging interest.

Flows and week-over-week changes

The reporting week saw a net exodus of contracts from the market. - Managed Money: This was the most active group, executing a bearish flow. They liquidated 4,376 long contracts while adding a modest 756 short contracts, for a net selling of 5,132 contracts. - Producers/Merchants: Commercials covered a significant number of shorts, reducing their short positions by 4,616 contracts while also cutting longs by 2,179 contracts. This resulted in a net reduction of their short hedge by 2,437 contracts. - Swap Dealers: This category increased its net long position by 3,848 contracts, driven by a combination of adding 1,167 new longs and cutting 2,681 shorts. - Open Interest: The total number of outstanding contracts fell sharply by 10,375 to 325,815. This reduction in participation, led by Managed Money long liquidation, suggests capital is leaving the market.

Commercials vs speculators

The classic positioning dynamic remains firmly in place. Speculative groups are positioned for higher prices, while commercial hedgers are positioned for lower prices. - Speculative Longs: Managed Money holds a dominant long position, accounting for 37.4% of total longs versus only 4.7% of shorts. Their conviction remains strongly bullish, despite the recent reduction. - Commercial Shorts: Producers/Merchants dominate the other side of the ledger, holding a massive 53.5% of all short positions in the market, reflecting widespread producer hedging. - This week's action shows speculators taking profits or reducing risk, while commercials used the opportunity to slightly reduce their short hedges.

Open interest and participation

• Total open interest fell to 325,815 contracts, a significant decline of 10,375 from the prior week's 336,190. This reverses the trend of rising participation seen over the previous month. A decline in open interest alongside speculator long liquidation often signals a tired trend.
• The total number of traders was 403, roughly in line with recent weeks.
• Concentration on the short side remains moderate, with the four largest traders holding 15.7% of the net short position and the eight largest holding 24.5%. This is typical for a market with large commercial hedging programs.

Price context

• No price data was provided for the reporting period. Therefore, positioning changes cannot be directly correlated with price action. It is unclear whether the long liquidation from Managed Money occurred during a price rally (profit-taking) or a price decline (capitulation). This is a critical missing piece of context.

Risks and watchpoints

• Crowded Trade Risk: The Managed Money net long position of +106,639 contracts is still very large. A crowded trade is vulnerable to rapid unwinds if market sentiment shifts, which could accelerate any price declines.
• Long Liquidation: The primary driver of this week's change was speculators exiting long positions, not adding new shorts. A key watchpoint is whether this long liquidation continues in next week's report, which would signal a more definitive end to the recent bullish momentum.
• Commercial Hedging: The slight reduction in the massive commercial short position bears watching. If producers begin to cover shorts more aggressively, it could imply they see less downside risk to prices in the near term.