Classic COT Report

• Structure:
  • Commercials (hedgers, large corporations)
  • Non-Commercials (large speculators like hedge funds)
  • Non-Reportables (small traders)
• Pros: Good for long-term trends since commercials often trade against the market while large speculators reinforce trends.
• Cons: Uses an older classification, making it less precise for some markets.

Aggregated COT Report

• New classification:
  • More detailed trader categories (e.g., Swap Dealers, Managed Money, Producers)
• Pros: Provides a clearer market structure, especially for financial futures like currencies and stock indices.
• Cons: More complex to analyze and less useful for some commodity markets.

Which One to Use?

• Currencies, stock indices, bonds: Aggregated data is better since it separates institutional traders more precisely.
• Commodities (gold, oil, corn): Classic COT is often more relevant as it focuses on key players like commercials and speculators.
• Long-term trend analysis: Classic COT (commercials as a contrarian signal).
• Short-term trading & sentiment analysis: Aggregated COT (better insight into hedge funds & institutions).

For intraday or swing trading, the Aggregated COT might be more useful. If you focus on macro trends, the Classic COT is likely better.

The World Agricultural Supply and Demand Estimates (WASDE) report released by the USDA on February 11, 2025, provides updated insights into global agricultural markets. Here's a summary of key points:

Wheat:

• U.S. Outlook: Domestic use increased slightly, leading to a reduction in ending stocks by 4 million bushels to 794 million. Despite this decrease, ending stocks remain 14% higher than the previous year. The season-average farm price is steady at $5.55 per bushel.

• Global Outlook: Global wheat supplies rose by 0.6 million tons to 1,061.3 million, primarily due to increased production in Kazakhstan and Ukraine. Consumption also saw a slight uptick, while trade projections decreased, notably with China's imports reduced by 2 million tons to 11 million. Ending stocks are projected to decline by 1.3 million tons to 257.6 million, mainly due to reductions in China.

Coarse Grains (Corn):

• U.S. Outlook: No changes were made to the U.S. corn supply and use projections. However, the season-average farm price was raised by $0.10 to $4.35 per bushel.

• Global Outlook: Global coarse grain production is forecasted to decrease by 1.8 million tons to 1,492 billion. This decline is attributed to reduced corn production in Argentina and Brazil. Argentina's production was lowered due to heat and dryness affecting yields, while Brazil's reduction is linked to delayed second-crop planting in the Center-West region. Consequently, global corn ending stocks are projected to decrease by 3 million tons to 290.3 million.

Rice:

• U.S. Outlook: Slight increases in supplies and domestic use were noted, while exports decreased. Ending stocks rose by 3.5 million cwt to 47 million, marking the highest level in a decade. The all rice season-average farm price was adjusted down by $0.20 to $15.40 per cwt.

• Global Outlook: Global rice supplies decreased marginally by 0.2 million tons to 712.2 million, mainly due to reduced production in Sri Lanka. Consumption increased slightly, and trade reached a record 58.3 million tons, driven by higher exports from India. Ending stocks are projected to decline by 0.5 million tons to 181.6 million, with notable reductions in India and Sri Lanka.

Oilseeds (Soybeans):

• U.S. Outlook: No changes were made to the U.S. soybean supply and use projections.

• Global Outlook: Argentina's soybean production was reduced by 3 million metric tons to 49 million, reflecting adverse weather conditions. Brazil's production estimate remained unchanged at 169 million metric tons. Global ending stocks declined by 4 million metric tons to 124 million, falling below pre-report expectations.

Market Reactions:

The report was viewed as neutral for corn, soybeans, and wheat. Market participants are focusing on South American production conditions, crop insurance price discovery, potential tariff disruptions, and the upcoming March Prospective Plantings Report.

In summary, the February 2025 WASDE report indicates minor adjustments in U.S. agricultural projections, with more significant changes in global estimates, particularly concerning South American crop production.

The World Agricultural Supply and Demand Estimates (WASDE) report released on January 10, 2025, provided crucial updates on global agricultural markets. Below is an analysis of the key markets: wheat, corn, soybeans, soybean meal, soybean oil, oats, and rice.

1. Wheat

• Global Production: Global wheat production was revised downward to 793 million tons, a decrease of 2 million tons due to lower-than-expected yields in the EU and other regions. This marks a notable supply reduction compared to earlier forecasts.
• Consumption: Forecasted at 802.5 million tons, leading to a continued drawdown of stocks.
• Ending Stocks: Reduced to 258 million tons, the lowest since 2016/17, indicating tight global supply and supporting higher prices.

2. Corn

• Global Production: Estimated at 1,218 million tons, representing a slight decrease (0.8%) from the previous year due to declines in production in Ukraine (-18%), Russia (-21%), and the EU (-6%).
• Demand: Consumption is projected at 1,238 million tons, growing by 1.6% due to increased usage in China and India.
• Ending Stocks: Estimated at 296 million tons, similar to levels observed in 2020/21. Stock-to-use ratios suggest continued tightness in supply.

3. Soybeans

• US Production: Revised downward to 4,366 million bushels (previous: 4,561 million bushels), attributed to lower yields in states like Illinois, Iowa, and Ohio.
• Global Production:
  • Argentina: Maintains a forecast of 52 million tons despite ongoing weather challenges.
  • Brazil: Unchanged at 169 million tons, potentially achieving a record-high harvest.
• Ending Stocks: Global soybean stocks were adjusted downward to 128.37 million tons (December forecast: 131.87 million tons).

4. Soybean Meal

• US Prices: Increased by $10 to $310 per short ton, reflecting higher feed demand and tighter supplies.
• Global Trade: Remains robust, driven by growing demand in Asia for animal feed, particularly in China.

5. Soybean Oil

• US Prices: Stable at 43 cents per pound.
• Demand Dynamics:
  • Domestic biofuel demand remains strong.
  • Export outlook remains steady, supported by consistent international interest, particularly from Asia.

6. Oats

• Production: No significant revisions were made in the January report. US production remains aligned with previous estimates.
• Consumption: Demand is stable, with modest growth in food and feed sectors.
• Stocks: Projected to remain at healthy levels, keeping oat prices range-bound.

7. Rice

• Global Production: Estimated at 508 million tons, largely unchanged from the prior forecast, with strong contributions from Asian producers like India and Vietnam.
• US Production: Slightly revised downward due to weather impacts in the southern states.
• Exports: Global trade is projected to rise slightly due to increased demand from Africa and the Middle East.

Market Implications

The January 2025 WASDE report highlights tightening supplies in key markets such as wheat, corn, and soybeans. While soybean oil prices remain stable, soybean meal and grain markets could see upward price pressure due to reduced stock levels and increased demand. Oats and rice remain relatively stable, with no significant changes in supply-demand dynamics.