Weekly Commitments of Traders Provide Window to Market Sentiment

The government’s Commitments of Traders report, a widely-followed weekly gauge of investor sentiment in corn, crude oil and many other major commodities, has come a long way from its origins in the grain markets of the Roaring Twenties.

Published on Fridays by the U.S. Commodity Futures Trading Commission, the report offers detailed numbers on futures and options positions held by several classes and sub-classes of market participants, including swap dealers, index funds and commercial processors of grains and other commodities.

Market analysts and financial journalists scour the reports, often citing “net long” and “net short” positions held by speculators as indicators of shifts in bearish and bullish sentiment in specific markets. Position figures in the CFTC reports typically account for 70% to 90% of a given market.

This research note will explain how the COT report is generated and provide you with a better understanding of how the data is used by market analysts.

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