COT Jul 7 – Lean Hogs & Kiwi at Record Lows

Five markets reached 95th percentile or better positioning extremes this week — lean hogs and New Zealand dollar at the 1st percentile, Bitcoin and cotton at the 98th and 97th, and British pound at the 3rd.

For anyone new to COT data: this means large speculative traders (primarily hedge funds) have positioned themselves more aggressively net short in lean hogs and the New Zealand dollar than in 99% of the past two years. It's a measure of crowding, not a directional price forecast.

This analysis uses data from the CFTC Commitment of Traders Report, tracking non-commercial (speculative) positioning across 43 futures markets. Percentile rankings compare current net positions against historical distributions over 2-year and 10-year windows. Full Methodology → | Download this week's data (JSON) | View Interactive Dashboard →

Top 10 Most Extreme Positions

Rank	Market	Net Position	2Y Percentile	10Y Percentile	Z-Score
1	Lean Hogs	-64,421	1st	1st	-2.60
2	New Zealand Dollar	-65,189	1st	1st	-1.90
3	Bitcoin	+3,500	98th	99th	+2.30
4	British Pound	-87,903	3rd	1st	-1.58
5	Cotton	+88,428	97th	84th	+2.45
6	5Y Treasury	-1,359,116	94th	43rd	+1.60
7	Japanese Yen	-123,778	6th	9th	-1.70
8	Nasdaq 100	-8,741	7th	4th	-1.60
9	30Y Treasury	-143,591	9th	14th	-1.62
10	Copper	+64,272	90th	95th	+1.42

Lean Hogs: Most Extreme Position Across All Markets

Lean hogs claimed the top extreme slot this week with non-commercial traders holding -64,421 contracts net short — the 1st percentile in both the 2-year and 10-year windows. Z-score of -2.6. This is the most statistically extreme position among all 43 markets I track.

The build was sustained, not a spike. Four-week average sits at -40,446 contracts, thirteen-week at -55,684. That's consistent directional accumulation over three months, not a tactical jump. Non-commercial net shorts represent 21.7% of total open interest — a concentrated positioning condition where hedge-fund-style traders have crowded into the short side.

Commercials (producers and processors who hedge physical hog exposure) hold +62,268 contracts net long, representing 21% of open interest on the opposite side. This is the normal state — specs short, commercials long. What's abnormal is the magnitude and persistence.

Within this 104-week sample, readings below the 5th percentile have been uncommon. The positioning is extreme, but the positioning data alone doesn't tell you whether it's early or exhausted.

New Zealand Dollar: Matching the Hogs at 1st Percentile

The New Zealand dollar matched lean hogs at the bottom of the distribution — 1st percentile across both windows, Z-score -1.9, net position -65,189 contracts.

Similar build pattern. Four-week average: -62,418. Thirteen-week: -61,155. Multi-week accumulation, not event-driven.

The crowding ratio here is more concentrated than hogs: -57.4% of open interest. That's an unusually large share of total market participation held net short by non-commercial traders. Commercials hold +68,783 net long (60.6% of OI), again the normal hedge structure but at an elevated intensity.

The British pound is nearby at the 3rd percentile (1st over 10 years) and Japanese yen at the 6th percentile. FX positioning is skewed heavily net short across the G10 outside the US dollar index, which sits at the 83rd percentile net long.

Bitcoin and Cotton: The Other End

Bitcoin sits at the 98th percentile over two years, 99th over 10 years. Net position +3,500 contracts. Z-score +2.3. Non-commercial crowding ratio: 18.6% of open interest net long. This is near the highest positioning in the dataset.

Cotton reached the 97th percentile (84th over 10 years) with +88,428 contracts net long. Crowding ratio: 27.8% of OI. Both are sustained builds — four-week and thirteen-week averages cluster tightly around current levels.

These aren't mirror images of the hog/Kiwi shorts. Open interest in Bitcoin is 18,832 contracts; in cotton it's 318,028. The leverage of a 1,000-contract unwind is different in each. But the percentile extremes signal the same thing: positioning is crowded relative to the recent past, and crowded trades are sensitive to disappointment.

5Y Treasury Shorts: The Percentile Divergence Case

The 5-year Treasury note caught my attention not because it's the most extreme, but because of the divergence between windows. Net position: -1,359,116 contracts. That's the 94th percentile over two years, but only the 43rd percentile over 10 years.

Translation: speculative shorts in the 5Y are extreme within the recent sample, but mid-range in the longer structural context. This positioning level has precedent in earlier cycles. It suggests the current configuration is less about new behaviour and more about a return to a prior regime.

Four-week average: +251,771. Thirteen-week: +277,021. The deviation from recent months is sharp. The 5Y short is moving away from the median after sitting near it for weeks. Non-commercial crowding ratio: -21.9% of OI. Commercials hold +1,330,507 net long, representing the offsetting hedge side.

The 2Y and 10Y notes sit at the 52nd percentile — dead median. The 30Y bond is at the 9th percentile net short (14th over 10 years). The Treasury curve positioning isn't uniform. The 5Y is where the speculative action clustered.

Nasdaq 100 and the Alignment Signal

Nasdaq 100 is at the 7th percentile (4th over 10 years) with -8,741 contracts net short. Z-score -1.6. That's notable on its own, but this week it also triggered the alignment signal: both large speculators and commercials are positioned net short.

Large spec net: -8,741 (-2.9% of OI). Commercial net: -6,350 (-2.1% of OI). When both groups align on the same side, small speculators (retail public) hold the entire counterparty position. Futures markets are zero-sum. If two groups are net short, the third must be net long by the exact offsetting amount.

This configuration appeared in four markets this week: Nasdaq 100, Euro FX, S&P 500, and feeder cattle (the only "both long" case). For Nasdaq, the signal coincides with a percentile extreme, which amplifies the observation. Historically, when large specs and commercials have aligned on the same side, small spec positions have sometimes coincided with periods of elevated positioning volatility — though the timing cannot be determined from positioning data alone.

The S&P 500 showed the same pattern (both short) but at the 73rd percentile, not an extreme. Euro FX triggered it at the 18th percentile. These are structural observations about market positioning concentration, not signals to act on.

What Different Scenarios Might Mean

Lean Hogs

• If price continues lower and the net short position extends beyond -70,000 contracts, then this may be consistent with a sustained trend-following positioning regime — the kind that has historically sometimes persisted for multiple months before capitulation. The sustained build (consistent across 4-week and 13-week windows) suggests structural conviction rather than tactical entry.

• If price stabilises or reverses higher while the net short position remains below the 5th percentile, then the 21.7% crowding ratio indicates concentrated short exposure that could unwind quickly — in past cycles, similar configurations have occasionally coincided with short-covering rallies, though the magnitude and timing are not predictable from positioning data.

• If the positioning begins to normalise toward the 20th-30th percentile range over the next 2-3 weeks without a sharp price move, then this may indicate noise or tactical repositioning rather than conviction exhaustion — particularly if open interest remains stable.

New Zealand Dollar

• If the Kiwi weakens further and the net short position remains below the 5th percentile for multiple consecutive weeks, then this is consistent with a structural re-rating of the currency in speculative positioning — the 10-year percentile match (1st in both windows) suggests this isn't just a recent phenomenon but a return to historically extreme levels.

• If price rallies and the -57.4% crowding ratio begins to unwind, then this may indicate short exhaustion given the concentration of net speculative exposure — historically, when crowding ratios have exceeded ±50% of OI, positioning unwinds have sometimes moved faster than the initial build.

• If other G10 currencies (GBP at 3rd percentile, JPY at 6th) begin to show similar short unwinds while NZD positioning persists, then this may signal differentiated macro views rather than broad USD strength — in which case the NZD short may reflect New Zealand-specific repricing.

Bitcoin

• If price continues higher and the net long position extends beyond the 99th percentile, then this may be consistent with late-stage trend participation — the sustained build (4-week and 13-week averages cluster near current levels) suggests this isn't a tactical spike, but the 18.6% crowding ratio indicates meaningful concentration risk.

• If price stalls near current levels while positioning remains above the 95th percentile, then in past cycles this type of divergence has sometimes preceded positioning unwinds — particularly in markets with lower liquidity where concentrated net longs represent a significant share of open interest (OI = 18,832 contracts).

• If open interest expands materially while net positioning remains elevated, then this may dilute the crowding ratio and extend the runway for the current configuration — though I cannot assess OI trends directly as OI history is not tracked in this dataset.

This analysis is for educational purposes only and does not constitute financial advice.

Next week's report covers the period ending July 14, 2026.

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