A Brief History of the Commitments of Traders (COT) Report

A Brief History of the Commitments of Traders (COT) Report

American agriculture experienced extreme economic volatility between the two world wars. Wheat farmers in particular endured dramatic swings in prices from the period surrounding World War I through the onset of World War II.

During the war, global supply disruptions pushed wholesale agricultural prices sharply higher. Prices continued rising briefly after the war ended, but by the 1920s European agricultural production had largely recovered. The return of European crops flooded world markets, causing wheat prices to collapse. American farmers were soon producing crops that sold for less than their cost of production. By the time of the Wall Street Crash of 1929, U.S. agriculture had already been in deep economic distress for years. Although prices temporarily recovered in the mid-1930s, the broader crisis persisted until wartime demand returned in the early 1940s.

The Grain Futures Act (1922)

In response to market instability and concerns about speculation, Congress passed the Grain Futures Act of 1922, signed by Warren G. Harding.

For the first time, members of the Chicago Board of Trade were required to report their aggregate futures positions to a newly created regulatory body known as the Grain Futures Administration. These figures were first published in an annual report to Congress in 1924.

From the outset, an important feature of the report was the distinction between two types of market participants:

• Commercial traders (“the trade”), who used futures markets to hedge price risk related to their underlying business.

• Speculators, who traded futures primarily to profit from price movements.

This classification laid the groundwork for the modern Commitments of Traders report.

Early Resistance from Traders

The reporting requirements were controversial among market participants. Traders in Chicago initially attempted to block the rules through legal challenges, arguing that the disclosures violated their trading privacy. After failing in court, they sought another solution.

In 1925, the Board of Trade Clearing Corporation was established to aggregate trades while maintaining the anonymity of individual traders.

Despite these measures, some large traders remained openly dismissive of government oversight. One notable figure was Arthur Cutten, a powerful grain speculator who reportedly took delivery of roughly five million bushels of wheat in 1926—illustrating the massive positions some traders could control even during this early regulatory period.

The Commodity Exchange Authority (1936)

Regulation expanded with the passage of the Commodity Exchange Act of 1936, which created the Commodity Exchange Authority (CEA).

The act gave regulators stronger powers to:

• impose speculative position limits

• investigate potential market manipulation

• regulate futures trading more broadly

It also banned commodity options trading, a restriction that remained in place until 1982.

Reporting of trader positions continued under the CEA, with statistics initially published monthly.

Birth of the Commitments of Traders Report

In 1942, trader position statistics began appearing in a separate publication known as the Commodity Futures Statistics Report. These reports still appeared only periodically.

The first official Commitments of Traders report was published on July 13, 1962. It covered large trader positions across 13 agricultural commodity markets, providing one of the earliest systematic views of how hedgers and speculators were positioned in futures markets.

Creation of the CFTC

A major regulatory shift occurred in 1974 when Congress created the Commodity Futures Trading Commission (CFTC), which replaced the CEA as the primary regulator of U.S. futures markets.

Under the CFTC, the COT report expanded to include additional details such as:

• the number of traders in each category

• new-crop and old-crop position breakdowns

• concentration ratios, showing the percentage of open interest held by the largest traders

Modern Weekly Reporting

Over time, the reporting frequency increased:

• 1990: Mid-month and month-end reports introduced

• 1992: Reports published every two weeks

• 2000: Transition to the current weekly schedule

Today, the COT report is released each Friday at 3:30 p.m. Eastern Time, based on trader positions recorded at the close of trading on the preceding Tuesday. The data is publicly available through the Commodity Futures Trading Commission website and remains one of the most widely used tools for understanding positioning in futures markets.