Cocoa Futures COT Brief: Week Ending 2026-03-13

Executive Summary

This report covers positioning changes in the Cocoa futures market for the week ending March 13, 2026. The primary development was a significant bearish reversal from the Managed Money category, which added aggressively to short positions after two weeks of short-covering. This occurred as Commercials maintained their near-record net short stance, indicative of heavy producer hedging. Swap Dealers absorbed this selling, increasing their own net long position to a new multi-month high. Open interest, after a period of explosive growth, has stalled, suggesting market consolidation or participant exhaustion.

Positioning

• Managed Money (Funds): Flipped back to a more bearish stance, expanding their net short position to -7,726 contracts. This is a significant increase from the prior week's -4,087 net short but remains below the extreme short of -11,874 contracts seen on February 20.
• Producer/Merchant (Commercials): Remain heavily net short at -19,081 contracts. This is one of the largest net short positions observed in the provided historical data, rivaling the -19,711 contract peak from February 27, and points to sustained, large-scale producer hedging.
• Swap Dealers: Increased their already substantial net long position to +38,127 contracts, the largest level in the dataset provided. This group continues to be the primary counterparty to commercial short hedging.

Flows and Week-over-Week Changes

• Managed Money: The shift to a deeper net short was driven by aggressive new short selling. Funds added +2,931 short contracts while simultaneously liquidating a smaller -708 long contracts, resulting in a net sale of 3,639 contracts for the week.
• Producer/Merchant: Exhibited relatively minor activity, adding +495 short contracts and +152 long contracts. While the weekly flow was small, it reinforces their underlying position as net sellers/hedgers.
• Swap Dealers: Were the major buyers this week. They significantly increased long exposure by +4,364 contracts against a smaller increase of +1,455 contracts on the short side.

Commercials vs Speculators

The classic divergence between commercial and speculative interests is stark. - Commercials (Producers/Merchants) are positioned with a deep net short (-19,081 contracts), reflecting a strong view from the physical industry that current or forward prices are attractive for hedging future production. - Speculators, as a whole, are providing the offsetting length. However, the speculative camp is split: - Managed Money holds a net short position (-7,726 contracts), aligning with a bearish price outlook. - Swap Dealers, who also serve speculative and financial functions, hold a massive, record-sized net long position (+38,127 contracts), acting as the market's primary liquidity provider against commercial selling.

Open Interest and Participation

• Total Open Interest (OI) stood at 192,004 contracts, a marginal increase of just +192 contracts from the prior week.
• This flat reading is significant as it follows a period of massive expansion, with OI surging by over 70,000 contracts since late December 2025. The stall in OI growth suggests a potential pause or consolidation phase after a major influx of new participation.
• Market concentration remains moderate. The four largest short-side traders hold 14.2% of the net position, while the four largest long-side traders hold 12.0%.

Price Context

• Price series data was not provided for this analysis. Therefore, it is not possible to correlate these positioning changes with specific price movements during the reporting week. The bearish shift from funds could have been a reaction to falling prices or an attempt to sell into a rally.

Risks and Watchpoints

• Positioning Extremes: The record net long held by Swap Dealers and the near-record net short held by Commercials represent significant, polarized positions. Any catalyst that forces an unwind of this dynamic could lead to heightened volatility.
• Managed Money Reversal: The renewed short-selling by funds is a key development. It marks a sharp reversal from two weeks of short-covering. Further short-building would signal strengthening bearish conviction, while a quick reversal would suggest indecision.
• Stagnant Open Interest: The abrupt halt in OI growth is a critical watchpoint. A resumption of OI growth would signal new capital entering the trend, while a decline in OI alongside position covering would indicate liquidation and potential trend exhaustion.
• Swap Dealer Capacity: The Swap Dealer long is the lynchpin of the current market structure. Their continued willingness and capacity to absorb commercial hedging is essential. Any signs of them reducing this long position would be a major bearish signal for the market's ability to absorb producer selling.