Elev8 broker’s CFTC sentiment guide for FX and…

Introduction

Knowing what side of the trade large market participants are taking is critical to any CFD trading strategy. The current price reflects what has already happened. Positioning, on the other hand, shows just how crowded the dominant view has become. Elev8 broker has analysed the latest sentiment data and is here to present the results so that traders can see more than the last candle on the chart.

CFTC COT report

Every Friday, the U.S. Commodity Futures Trading Commission (CFTC) publishes its Commitments of Traders (COT) report. The report breaks down outstanding trading positions (open interest) in U.S. futures and options markets by trader type: commercial and non-commercial. Commercial players use the market to hedge (for example, a larger farmer selling wheat futures to lock in high prices) while non-commercial traders, including investment funds and other large speculators, take directional risk for financial gain.

Essentially, the report shows market sentiment, and it does so in a consistent way. Therefore, it can help retail traders identify overbought or oversold conditions in the market, follow large speculative trends, and anticipate price reversals when positions become overly crowded. However, it is important to analyse the data correctly.

Elev8 broker tracks the net positions of non-commercial traders, such as hedge funds, across both options and futures markets. We subtract short contracts from long contracts to reveal the true directional bias. However, raw contract totals do not always signal trend exhaustion. To identify true exhaustion points, the Elev8 broker applies a relative sentiment index (RSI) from 0 to 100 over a rolling three-year window. A score above 90 indicates overbought positioning near three-year highs, while a reading at or below 10 indicates oversold conditions near three-year lows.

Latest results

The chart below shows net speculative positions and calculated RSI for seven currencies and thirteen commodities.

Disaggregated commitments of traders report options and futures combined

(Net speculative positions and relative sentiment index)

Source: CFTC, Elev8 broker calculations

Agricultural commodities and energy

When looking at the traded commodities, we see extreme conditions in a number of agricultural goods. Indeed, large speculators have accumulated substantial net long positions across key agricultural crops, including corn, sugar, soybeans, and cotton. A rare combination of geopolitical conflict, extreme weather, and tight supply-demand balance has restricted global availability of these commodities, drawing speculative capital into long contracts.

The core reason for this is the tight global grain balance. According to the latest USDA World Agricultural Supply and Demand Estimates, global corn use will exceed production by nearly 30 million metric tonnes in the 2026–2027 season, the largest deficit in more than three decades. World wheat output also lags consumption. In addition, the Russia-Ukraine conflict continues to disrupt Black Sea grain shipments. As a result, combined corn and wheat output among primary exporters faces its sharpest percentage drop since the 2012–2013 season. Hot, dry weather has also left French maize conditions at a record low. Unsurprisingly, despite typical seasonal pressure, Chicago corn futures rallied 16% in August.

Furthermore, military conflicts in the Middle East have drastically reduced commercial shipping traffic through the Strait of Hormuz and the Bab el-Mandeb Strait. This disruption has driven diesel prices to record highs, negatively affecting the entire agricultural supply chain, from farming to transport.

Soybean long positioning relies on two main factors. First, Chinese demand grew ahead of the diplomatic summit in the U.S. China completed over half of its commitment to buy 25 million metric tonnes of United States soybeans. Second, Brazilian farmers will likely expand soybean plantings at the slowest rate in 20 years. Weaker profit margins, expensive credit, and high fertiliser costs restrict growth in Brazil. Additionally, extreme weather threatens Brazilian output.

Sugar attracts heavy speculation because India may need to import substantial volumes of sugar due to depleted stocks and an uneven monsoon season. Brazilian sugar production could also fall by around 3–5 million tonnes if heavy rains continue through October and November.

In short, two active conflicts, a weaker global crop balance, adverse weather effects and trade policy have created supply concerns across much of the agricultural complex. That mix has drawn speculative capital into long positions in agriculture. Given that so much bad news has already been priced in, it seems reasonable to suggest that a contrarian short position in a number of agricultural commodities could soon become justified.

Conversely, the situation is very different in natural gas options and futures. There, large speculators hold a massive, short position (close to 50,000 net-short contracts, NYMEX and ICE combined), making a contrarian long position look attractive.

Foreign exchange

When looking at the sentiment in the Forex market, we do not really see any big extremes. However, the long side of the trade in Japanese yen (JPY) and the short side of the trade in the euro (EUR) are becoming overcrowded. The sharp divergence in positioning between JPY and EUR reflects the difference in policy paths, economic weak spots, and political risks between Japan and the Eurozone.

As shown in the chart above, large speculators hold more than 120,000 net-long contracts in JPY (RSI at almost 85) and almost 60,000 net-short contracts in EUR (RSI at less than 17).

The yen long trade is tied to the Bank of Japan’s (BOJ) monetary policy tightening. The bank raised its policy rate to 1.25%, the highest level in 31 years. After decades of very low rates, Japan is finally normalising its policy, and speculators have positioned for a stronger yen. Indeed, speculators moved very fast. CFTC data showed that traders shifted from a $7 billion short position to a $10 billion long position against the USD in early September. In fact, leveraged funds made their first bullish bet in yen since July 2025, and most of that long was built when USDJPY traded below 155.00.

As for the euro, the short here rests on the clear policy divergence between the European Central Bank (ECB) and the Federal Reserve (Fed). ECB increased rates twice this year, but the market expects no further hikes till 2027. In contrast, the U.S. Federal Reserve maintained a hawkish stance on 16 September, with markets pricing in a high probability of another rate increase by year-end. Statements from ECB President Christine Lagarde and Vice President Boris Vujcic signalled resistance against additional tightening.

Furthermore, the Eurozone faces economic and political risks. French fiscal problems pushed the cost of insuring against government default to a multi-year high. In Germany, the far-right AfD took first place in state elections and weakened Chancellor Merz’s conservative party. In addition, higher wholesale gas prices feed directly into Eurozone inflation much faster than before, exposing the region to severe energy vulnerability.

Conclusion

CFTC COT reports provide clear insight into market sentiment. In agricultural commodities, supply constraints and geopolitical instability keep capital on the long side of the trade. In the Forex world, policy divergence favours the Japanese yen against structural challenges facing the euro. By tracking CFTC sentiment indicators, traders at Elev8 broker can see more market clarity, evaluate risk, and identify extreme conditions to prepare for either contrarian or directional trades.

Disclaimer: This article does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk—Elev8 does not accept any liability for any resulting losses or consequences.

Elev8 is a licensed global broker serving 18+ million traders in 100+ countries. It offers market access through 3 platforms: Elev8Trader, MetaTrader 4, and MetaTrader 5. Operating under licences from Mauritius and Seychelles, Elev8 provides traders with the tools to help spot and capture more market opportunities. The broker received the ‘Best Trading Experience Broker 2026’ and the ‘Best Trading Platform Provider 2026’ awards from FxDailyInfo.

One of Elev8’s key features is Space, an analytics hub within the Elev8Trader platform that helps traders expand their market horizons. With its personalised feed, daily expert analytics, and community content, Space facilitates faster access to information and market data.

Frequently Asked Questions

What is the CFTC Commitments of Traders report?

It is a weekly report published every Friday by the U.S. Commodity Futures Trading Commission. It breaks down outstanding trading positions, or open interest, in U.S. futures and options markets by trader type. Commercial players use the market to hedge, while non-commercial traders such as investment funds and other large speculators take directional risk for financial gain.

How does Elev8 broker’s relative sentiment index work?

Elev8 broker subtracts short contracts from long contracts to find the net directional bias of non-commercial traders, then scores it on an index from 0 to 100 across a rolling three-year window. A reading above 90 indicates overbought positioning near three-year highs, and a reading at or below 10 indicates oversold conditions near three-year lows.

Where is positioning most stretched right now?

In commodities, large speculators hold substantial net longs in corn, sugar, soybeans and cotton, while natural gas sits close to 50,000 contracts net short across NYMEX and ICE combined. In FX, speculators hold more than 120,000 net-long contracts in the Japanese yen, with an RSI near 85, and almost 60,000 net-short contracts in the euro, with an RSI below 17.