When the radar goes dark: Navigating the market after the COT report delay

[Ben Graham]

Key takeaways:

• The 43-day COT report delay created a data vacuum, allowing "managed money" to build crowded, unseen market positions.
• The backfilled COT data caused a "positioning shock" in markets like soybeans, triggering sharp reversals as positions realigned.
• The lack of speculative sentiment data highlighted a major risk: market opacity significantly increases the chance of a "volatility explosion" upon the report's return.

The 43-Day data vacuum: Unmasking the positioning shock in soybeans

As a trader, operating without the Commitments of Traders (COT) report during the recent 43-day government shutdown felt like flying a plane through a thick fog without a radar. When the CFTC finally resumed operations on November 13, 2025, we were met with a massive data vacuum that had left speculative "managed money" to operate under the radar for over six weeks.

The impact was immediately visible in the grains market; for instance, once the backfilled data started hitting the tape, we discovered a massive shift in soybeans, where funds had swung from a net short to a staggering net long of over 229,000 contracts. This "positioning shock" triggered sharp reversals as the market scrambled to realign with the reality of just how crowded those trades had become while the lights were off in Washington.

The recovery process has been a lesson in patience and "detective work," as the CFTC opted to release the backlogged reports in chronological order rather than jumping to current dates. This meant that throughout late November and December, market participants were often trading based on snapshots that were weeks old, forcing us to rely on proxies like ETF flows, and the LME’s (London Metal Exchange) positioning data just to guess where the "big money" was leaning.

While the Commission managed to accelerate the schedule to get us current by December 29, the lag effectively extended the period of market opacity. For those of us in the pits or behind the screens, the shutdown serves as a stark reminder: when the primary barometer for speculative sentiment goes dark, the risk of a "volatility explosion" upon its return becomes the single most important factor to hedge.

Managed money vs. small speculators: Diverging net positions in soybean futures

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Soybeans Chart 2023 - 2025 Source: COTbase.com Past perfomance is not indicative of future results

The above chart displays a time series of net positions (Long minus Short) for key participant groups in the soybean futures market, which is crucial for gauging speculative sentiment and potential market turning points.

The green trendline on the above chart shows the clear and aggressive swing in the Managed Money line. This is represented by the Managed Money line rapidly crossing above the zero line and spiking to the highest levels on the history axis, illustrating the sudden, crowded long trade that developed while the market was flying "without a radar."

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The red trendline shows small speculators were consistently selling or reducing positions while prices were moving higher, a common approach often seen on small speculators and/or retail traders in other markets such as FX trading. Interestingly, and as the price began to fall, their net position has trended back toward the zero line, suggesting "Small speculators" are covering shorts or attempting to catch a bottom as prices soften.

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