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

NFX SM6TC SUPRAMAX 6T/C AVG (Non-Commercial)

13-Wk Max 6,356 2,196 0 0 4,160
13-Wk Min 5,615 1,935 -227 -87 3,680
13-Wk Avg 5,973 2,069 -57 -20 3,905
Report Date Long Short Change Long Change Short Net Position Rate of Change (ROC) ℹ️ Open Int.
December 10, 2019 5,615 1,935 0 0 3,680 0.00% 7,099
December 3, 2019 5,615 1,935 -222 -87 3,680 -3.54% 7,099
November 26, 2019 5,837 2,022 0 0 3,815 0.00% 7,569
November 19, 2019 5,837 2,022 0 0 3,815 0.00% 7,569
November 12, 2019 5,837 2,022 0 0 3,815 0.00% 7,569
November 5, 2019 5,837 2,022 -222 -87 3,815 -3.42% 7,569
October 29, 2019 6,059 2,109 0 0 3,950 0.00% 8,039
October 22, 2019 6,059 2,109 0 0 3,950 0.00% 8,039
October 15, 2019 6,059 2,109 0 0 3,950 0.00% 8,039
October 8, 2019 6,059 2,109 -70 0 3,950 -1.74% 8,039
October 1, 2019 6,129 2,109 -227 -87 4,020 -3.37% 8,109
September 24, 2019 6,356 2,196 0 0 4,160 0.00% 8,604
September 17, 2019 6,356 2,196 0 0 4,160 0.00% 8,604

Net Position (13 Weeks) - Non-Commercial

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

COT Interpretation for FREIGHT RATE

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 Neutral
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 break down a COT-based trading strategy for NFX SM6TC Supramax 6T/C Average Futures (specifically catering to retail traders and market investors). This requires understanding the limitations of the COT data for such a niche commodity, as well as combining it with other forms of analysis.

Understanding the Landscape: NFX SM6TC Supramax 6T/C Average Futures

  • What It Represents: This future contract reflects the average spot rate for Supramax dry bulk vessels (around 50,000-60,000 deadweight tons) on key trade routes. It's essentially a bet on the cost of shipping commodities like grain, coal, and iron ore.
  • Niche Market: Unlike widely traded commodities like crude oil or gold, the NFX SM6TC contract is relatively specialized. This means:
    • Lower Liquidity: Spreads can be wider, and getting in and out of positions might be trickier. Be cautious about position sizing.
    • Data Scarcity: Information and analysis on this specific contract will be limited compared to more mainstream markets.
    • Dominant Players: A few large shipping companies or trading houses likely have a significant influence. This can make the market more prone to manipulation or sudden shifts in sentiment.
  • Key Drivers:
    • Global Demand for Raw Materials: Economic growth in China, India, and other developing nations strongly impacts demand for commodities shipped by Supramax vessels.
    • Supply of Vessels: New vessel construction and scrapping rates influence the available tonnage.
    • Port Congestion: Delays at ports can temporarily increase shipping rates.
    • Weather Events: Disruptions to shipping lanes (e.g., hurricanes, typhoons) can spike rates.
    • Geopolitical Risks: Trade wars, sanctions, and political instability can impact trade flows and shipping demand.
  • CFTC Commitment of Traders (COT) Report Relevance: The COT report provides insight into the net positions held by different participant categories:
    • Commercials (Hedgers): These are typically shipping companies, commodity traders, and other entities directly involved in the physical dry bulk market. They use futures to hedge their exposure to rate fluctuations. Their positions are often considered the most informed.
    • Non-Commercials (Speculators): These are typically hedge funds, commodity trading advisors (CTAs), and other financial institutions that trade the futures market for profit. Their positions reflect market sentiment and momentum.
    • Nonreportable Positions: Small positions, and it's generally not useful for analysis, though a large build-up or decrease in these positions could be a signal

Trading Strategy Based on COT Data

Core Principles:

  1. Follow the Commercials (with Caution): The fundamental premise is that commercials (hedgers) have a deeper understanding of the physical market and will generally be on the "right" side of the trade in the long run. However, this is not a guarantee.
  2. Confirm with Other Indicators: COT data should never be used in isolation. Combine it with technical analysis, fundamental analysis, and news flow.
  3. Manage Risk Aggressively: Given the niche nature and potential for volatility in this market, use stop-loss orders and position sizing appropriate for your risk tolerance.
  4. Be Aware of Time Lag: The COT report is released with a delay (usually Friday after the close of trading on Tuesday). Market conditions can change significantly in the intervening period.

Steps:

  1. COT Data Acquisition:
    • Download the weekly CFTC Commitment of Traders (COT) report. This is usually available on the CFTC website (cftc.gov). Look for the "Short Format" or "Legacy" reports. You need to find the specific data for "NFX SM6TC SUPRAMAX 6T/C AVG - NASDAQ FUTURES."
    • Alternatively, use a financial data provider (e.g., Bloomberg, Refinitiv, TradingView) that offers COT data feeds.
  2. COT Data Analysis:
    • Net Positions: Calculate the net position of Commercials (Longs - Shorts) and Non-Commercials (Longs - Shorts).
    • Trend Analysis: Track the trend of these net positions over time (e.g., over the past 6 months or year). Are Commercials becoming increasingly net long or net short? Is the opposite true for non-commercials?
    • Extreme Readings: Look for instances where net positions reach historically high or low levels. These "extreme" readings can signal potential overbought or oversold conditions.
    • Divergences: Look for divergences between the price of the futures contract and the net positions of the Commercials. For example, if the price is rising, but Commercials are decreasing their net long positions (or increasing their net short positions), this could be a bearish divergence.
  3. Technical Analysis:
    • Trend Identification: Determine the overall trend of the NFX SM6TC futures contract using techniques like moving averages, trendlines, and chart patterns.
    • Support and Resistance Levels: Identify key support and resistance levels where price is likely to find buying or selling pressure.
    • Momentum Indicators: Use indicators like RSI (Relative Strength Index) or MACD (Moving Average Convergence Divergence) to gauge the strength and direction of price momentum.
  4. Fundamental Analysis:
    • Global Economic Outlook: Monitor economic growth forecasts for key commodity-importing countries (especially China and India). Strong growth typically translates to higher demand for dry bulk shipping.
    • Commodity Demand: Track demand for key commodities transported by Supramax vessels (e.g., iron ore, coal, grain).
    • Vessel Supply: Monitor new vessel construction and scrapping rates.
    • Port Congestion: Stay informed about port congestion issues that can impact shipping rates.
    • Geopolitical Events: Keep abreast of trade wars, sanctions, and other geopolitical events that could disrupt trade flows.
  5. Trading Signals:
    • Bullish Signal:
      • Commercials are increasing their net long positions (or decreasing their net short positions).
      • The price of the futures contract is in an uptrend (confirmed by technical analysis).
      • Fundamental factors support increased demand for dry bulk shipping.
      • Momentum indicators are showing positive momentum.
    • Bearish Signal:
      • Commercials are decreasing their net long positions (or increasing their net short positions).
      • The price of the futures contract is in a downtrend (confirmed by technical analysis).
      • Fundamental factors suggest weakening demand for dry bulk shipping.
      • Momentum indicators are showing negative momentum.
  6. Entry and Exit Points:
    • Entry: Enter long positions near support levels on bullish signals and short positions near resistance levels on bearish signals.
    • Stop-Loss Orders: Place stop-loss orders below support levels for long positions and above resistance levels for short positions. The distance should be determined by your risk tolerance and the volatility of the market.
    • Profit Targets: Set profit targets based on technical analysis (e.g., resistance levels for long positions, support levels for short positions) or based on a multiple of your initial risk.
  7. Position Sizing:
    • Risk a Small Percentage of Capital: Never risk more than 1-2% of your trading capital on any single trade.
    • Adjust for Volatility: Reduce your position size if the market is particularly volatile.
  8. Monitoring and Adjustment:
    • Continuously Monitor: Keep a close eye on the market and adjust your positions as needed based on new information and changing market conditions.
    • Review COT Data Regularly: Review the weekly COT report to see if the positions of Commercials and Non-Commercials are changing.
    • Adapt to Market Conditions: Be prepared to adapt your strategy if the market deviates from your expectations.

Example Scenario:

Let's say you observe the following:

  • COT Report: Commercials have been steadily increasing their net long positions over the past few weeks. Their net long position is approaching a historically high level.
  • Technical Analysis: The price of the NFX SM6TC futures contract is in an uptrend, breaking above a key resistance level.
  • Fundamental Analysis: News reports indicate that China's iron ore imports are surging due to increased infrastructure spending.
  • Trading Decision: This combination of factors suggests a bullish outlook for the NFX SM6TC futures contract. You might consider entering a long position near the previous resistance level (now acting as support), with a stop-loss order placed below that level and a profit target based on the next resistance level.

Important Considerations for Retail Traders & Market Investors:

  • Information Asymmetry: Remember that large shipping companies and commodity trading houses likely have access to more real-time information about the physical market than you do. This gives them a potential advantage.
  • Market Manipulation: Be aware that the niche nature of this market makes it potentially more vulnerable to manipulation.
  • Liquidity Issues: Exercise caution when entering and exiting positions, especially if you are trading a large quantity. Use limit orders to avoid slippage.
  • Spread Costs: Pay attention to the bid-ask spread, as it can significantly impact your profitability.
  • Alternative Investment Options: Consider whether there are other, more liquid, and less specialized ways to gain exposure to the dry bulk shipping market. For example, you might invest in publicly traded shipping companies or ETFs that track the shipping industry.
  • Start Small: Begin with a small position size until you become comfortable with the market and your strategy.
  • Paper Trading: Practice your strategy in a simulated trading environment before risking real capital.
  • Due Diligence: Thoroughly research the market and the NFX SM6TC futures contract before investing.

Disclaimer: This is an example trading strategy and should not be taken as financial advice. Trading futures involves significant risk of loss. It is essential to conduct your own research and consult with a qualified financial advisor before making any investment decisions. The COT report is a useful tool, but it is not a crystal ball. It provides insight into market sentiment, but it does not guarantee future price movements.