Cocoa | Commitments of Traders - Week Ending 2026-02-06

Executive summary

This week's report reveals an increasingly bearish sentiment in the Cocoa market, with both speculative and commercial participants aggressively adding to short positions. Managed Money extended its net short to a multi-week extreme, indicating strong conviction from trend-followers. Simultaneously, Producer/Merchants expanded their own net short position, suggesting heavy producer hedging at current price levels. This wave of selling was met by Swap Dealers, whose net long position remains near its recent peak. The market saw a significant surge in open interest, confirming that new capital is flowing in to establish these new short positions, a classically bearish signal.

Positioning

• Managed Money (Speculators): The speculative net position deepened further into negative territory, now standing at a net short of 10,330 contracts (22,079 long vs. 32,409 short). This is the largest net short position for this category within the provided six-week data set, continuing a bearish trend from a net short of 9,503 contracts last week and a nearly flat position a month ago.
• Producer/Merchant (Commercials): Commercials also expanded their bearish hedge, with their position reaching a net short of 15,568 contracts (37,291 long vs. 52,859 short). This is also the largest net short recorded in the recent data, indicating a strong desire by producers to lock in prices.
• Swap Dealers: This category remains the primary counterparty to the market's shorts, holding a substantial net long of 29,529 contracts (31,056 long vs. 1,527 short). This position is near the highs for the reporting period, highlighting their role in absorbing the selling pressure.

Flows and week-over-week changes

The reporting week saw significant activity, driven by fresh short-selling from key participants. - Managed Money: This group added to both sides of the market, but the build in bearish bets was more pronounced. They added 1,559 long contracts while simultaneously adding a larger 2,386 short contracts, increasing their net short position. - Producer/Merchant: Commercials showed a strong inclination to hedge. While they added 2,285 long contracts, they added a much more substantial 4,628 short contracts, a clear indication of producer selling. - Non-Reportable (Retail): Small speculators flipped to a slight net long position of 547 contracts, driven by a reduction of 1,233 short positions.

Commercials vs speculators

The classic dynamic of speculators versus commercials shows both major groups aligned on the short side of the market, which is a noteworthy development. - Speculators (Managed Money) have decisively turned bearish over the past month. Their gross short position (32,409 contracts) now significantly outweighs their gross long position (22,079 contracts). - Commercials (Producers) are hedging aggressively. The significant week-over-week increase in their gross short position points to producers viewing current or recent market prices as an attractive opportunity to sell forward their expected production. - The convergence of both speculative selling and producer hedging creates a powerfully bearish positioning landscape.

Open interest and participation

• Total open interest surged by 10,857 contracts to a new recent high of 160,254 contracts.
• This sharp rise in open interest occurring alongside an increase in net short positioning from both Managed Money and Producers is a strong confirmation of the bearish trend. It signifies that new money is entering the market to initiate new short positions, rather than just long liquidation.
• Market concentration remains moderate. The four largest traders account for 12.5% of the net long side and 9.9% of the net short side.

Price context

Price series data was not provided for this reporting period. Therefore, a direct correlation between positioning changes and daily price action cannot be made. However, the aggressive building of short positions by both speculators and commercial hedgers strongly suggests that prices were likely falling during the reporting week, or at a minimum, that participants hold a strong expectation of future price declines.

Risks and watchpoints

• Crowded Short Trade: The Managed Money net short is at a six-week extreme. While this reflects strong bearish momentum, it also increases the market's vulnerability to a short-covering rally. Any unexpected bullish catalyst could trigger a rapid price reversal as these positions are unwound.
• Producer Selling as a Cap: The heavy commercial hedging may act as a ceiling on prices. Any rallies are likely to be met with further selling from producers who see it as another opportunity to lock in favorable prices.
• Swap Dealer Capacity: Swap Dealers are holding a very large net long position. Their capacity and willingness to continue absorbing selling pressure from the rest of the market will be a critical factor going forward. Any sign of them reducing this long exposure could exacerbate a move lower.