Executive Summary
The April 29, 2025, Commitments of Traders (COT) Disaggregated Report reveals critical shifts in speculative and commercial positioning across major agricultural commodities. Fund managers are reducing long exposure in lean hogs and soybeans, while commercial traders deepen their short hedges across livestock markets. In contrast, wheat markets display a rare and potentially explosive divergence: commercials are net long while managed money is heavily short. This inversion—rare in the wheat complex—suggests a looming positioning squeeze if supply-side disruptions or geopolitical shocks reprice fundamentals. Overall, the data reflect a market in transition, with speculators paring back exposure and commercials actively defending against downside risk.
Market Snapshot
| Commodity | Commercial Net (Contracts) | Managed Money Net | Trend Direction |
| Wheat | +49,412 | –121,415 | Diverging sharply |
| Lean Hogs | –119,409 | +2,389 | Bearish reset |
| Live Cattle | –166,904 | +26,170 | Hedging builds |
| Corn | –339,720 | +46,504 | Cautiously long |
| Soybeans | –156,846 | +18,823 | Longs trimming |
| Cotton | –22,332 | +10,235 | Range-bound |
| Feeder Cattle | –11,216 | +2,655 | Indecision |
Source: CFTC, Disaggregated COT Report as of April 29, 2025. Calculations by NFCM.
Speculators Exit Hogs, Soybeans Amid Fundamental Pressure
In the lean hog market, managed money reduced its net long position to 2,389 contracts, the lowest level since early 2023. Commercial short positioning, meanwhile, rose sharply to –119,409. This convergence reflects deteriorating confidence among speculators, likely driven by continued weakness in wholesale pork cutout values and export headwinds. According to the USDA, pork export volumes to China declined by over 15% in April, contributing to the reversal in speculative sentiment.
Soybeans exhibit a similar, though more measured, unwind. Managed money net longs now stand at 18,823—down nearly 14% from the prior week. The backdrop includes accelerating Brazilian harvest exports, tempering bullish U.S. outlooks. Commercials are increasing hedging pressure, pushing their net short position to –156,846 contracts.
Both markets signal a broader theme: fund managers are becoming more risk-averse heading into Q2, particularly in protein and oilseed complexes with fading upside catalysts.
Commercial Buying in Wheat Contrasts with Bearish Fund Positions
Chicago wheat is the standout anomaly in this report. Commercial traders have flipped aggressively net long, now holding +49,412 contracts—one of the most significant commercial net long exposures in recent memory. In contrast, managed money is net short –121,415 contracts.
This sharp divergence has the potential to trigger a short-covering rally. Wheat remains vulnerable to global supply shocks. The recent uptick in Black Sea tensions and spring planting delays in the U.S. Northern Plains may force funds to reassess their positioning. A similar inversion in March 2022 preceded a 20% price rally over two weeks. History does not always repeat, but positioning risk is elevated.
Cattle Markets Signal Hedging into Strength
Live cattle positioning continues its steady pattern. Commercials extended net shorts to –166,904 contracts, while managed money held a net long of +26,170. This is consistent with a market with record cash trade values but now faces tightening packer margins and increasing cold storage inventories. Per Sterling Beef Profit Tracker, cattle feeding margins have compressed to near breakeven, further justifying commercial risk offloading.
Feeder cattle, by contrast, show little speculative conviction. Fund positioning remained net long by only 2,655 contracts, suggesting uncertainty about feed cost relief and placement volumes.
Corn Remains Balanced Amid Weather Watch
Corn traders are recalibrating as planting progresses. Commercials trimmed their net short to –339,720, while managed money expanded long exposure modestly to +46,504 contracts. This balance implies neither a strong bullish nor bearish directional bias but rather a wait-and-see approach.
Market participants are likely eyeing U.S. planting progress and early yield conditions, particularly given NOAA’s updated May outlook showing below-average rainfall across the Corn Belt. Basis strength in key river markets also indicates tightness in old-crop pipeline inventories—supportive, but not enough to drive aggressive fund accumulation.
Cotton Drifts as Speculators Pull Back
Cotton continues to reflect a sideways narrative. Managed money trimmed long exposure to 10,235 contracts, while commercial net shorts expanded slightly to –22,332. The market lacks a clear directional story—export demand has stabilized, but macro volatility (especially a stronger dollar) has subdued speculative appetite.
Price Outlook and Strategic Considerations
The positioning data underscores a critical inflection point. Funds are retreating from extended long bets in most markets, while commercials are actively hedging strength or, in the case of wheat, stepping in aggressively on the long side. The wheat market’s divergence is especially notable and may warrant near-term price revaluation if supply disruptions escalate.
Livestock markets appear vulnerable to further downside unless export momentum improves or retail demand reaccelerates. Corn and soybean positioning remains reactive to planting data, while cotton awaits a stronger macro or demand signal.
Strategy
- Monitor wheat for reversal catalysts. The long-commercial/short-speculator dynamic raises the risk of a snapback rally. Weather or geopolitical disruption would be the trigger.
- Consider downside hedges in lean hogs. Speculative support has deteriorated; downside price pressure could build quickly.
- Stay flexible with grains. Positioning is balanced, but directional conviction could sharpen after the May WASDE or updated planting pace.
- Watch managed money re-engagement in cattle. A short-covering bid could emerge if boxed beef values stabilize.
Disclaimer: This communication is intended for informational purposes only and does not constitute trading advice. Futures and options trading involve substantial risk of loss and are not suitable for all investors.
