For Release: December 5, 2006
Washington, D.C. – The Commodity Futures Trading Commission (CFTC or Commission) announced today that it will begin publishing an additional Commitments of Traders (COT) report in January, 2007. The COT reports are weekly reports, published by the CFTC, showing aggregate positions of commercial and noncommercial traders in certain futures and options markets. The Commission currently publishes four COT reports: Futures-Only COT (both long form and short form) and Futures-and-Options-Combined COT (both long form and short form). The four existing COT reports, which cover over 90 markets, will continue to be published, with no changes in form, format or timing.
In addition, on January 5, 2007, the Commission will begin publishing a new weekly COT report, entitled “COT—Supplemental.” The new report will show aggregate futures and options positions of Noncommercial, Commercial and Index Traders in 12 selected agricultural commodities. Positions reported in the new “Index Traders” category will be drawn from both the current Noncommercial and the Commercial categories. Coming from the Noncommercial category will be positions of managed funds, pension funds and other institutional investors that generally seek exposure to commodity prices as an asset class in an unleveraged and passively-managed manner using a standardized commodity index. Coming from the Commercial category will be positions of entities whose trading predominantly reflects hedging of over-the-counter (OTC) transactions involving commodity indices—for example, swap dealers holding long futures positions to hedge short OTC commodity index exposure opposite institutional traders such as pension funds. (Note that the four current COT reports will continue to carry commodity index traders in the same Commercial and Noncommercial categories in which they now appear.)
CFTC Chairman Reuben Jeffery III said, “The Commission’s decision to begin publishing this additional COT report illustrates the CFTC’s commitment both to maintain an information system that keeps pace with changes in markets and trading practices and to provide the public with accurate and timely data regarding futures and option markets.”
Commissioner Michael Dunn, who chairs the Commission’s Agricultural Advisory Committee (AAC), added, “COT issues were discussed at length at the August 1, 2006, meeting of the AAC and the meeting transcript was incorporated into the public comment file. On behalf of the Commission and its staff, I want to acknowledge the invaluable contribution that the members of the AAC and participants at the meeting made to the Commission’s decision-making process on this critical issue.”
The 12 commodities covered by the new report, and the respective exchanges on which they are traded, are: corn, soybeans, wheat, and soybean oil on the Chicago Board of Trade; wheat on the Kansas City Board of Trade; cotton no. 2, coffee C, sugar no. 11, and cocoa on the New York Board of Trade; and live cattle, lean hogs, and feeder cattle on the Chicago Mercantile Exchange. Contemporaneously with publication of the first new report, the Commission will also publish comparable weekly data for 2006 for the 12 markets covered by the report in order to allow users of the report to view the new data in context.
The new report is a result of a June 21, 2006, Federal Register notice published by the Commission entitled, “Comprehensive Review of the Commitments of Traders Reporting Program.” The primary issue addressed in that notice involved changes in the nature of the positions carried in the COT reports. The notice pointed out that, prior to 1991, both the long and the short side of the commercial open interest listed in the COT reports represented traditional hedgers (producers, processors, manufacturers or merchants handling the commodity or its products or byproducts). Since that time, trading practices have evolved to such an extent that, today, a significant proportion of the long-side open interest in a number of major physical commodity futures contracts is held by so-called non-traditional hedgers (e.g., swap dealers), while the traditional hedgers may be either net long or net short (more often, the latter). The notice asked whether, in light of these changes, the COT report could still reliably be used to assess overall futures activity by persons who are directly involved in the underlying physical commodity markets. Based on the comments received, and the Commission’s own review, the agency determined to begin publishing the new COT report, showing the aggregate positions of index traders in a separate category. In this new COT report, the Commercial category will better represent traders who are directly involved in the underlying physical commodity markets. A Comprehensive Report on the Commission’s review of COT issues, summarizing the relevant questions, the comments received and the Commission’s response, is posted on the Commission’s website. Also available on the website is an executive summary of the full Report.
The new COT—Supplemental report will be published on a two-year, pilot program basis. During the course of the pilot program, the Commission will assess the relevance and usefulness of the new data and study whether it is possible and appropriate to expand the COT—Supplemental report to include data for other physical commodity futures markets.
R. David Gary
Last Updated: April 23, 2010