Cocoa Futures Positioning - Week Ending May 22, 2026

Executive summary

This report covers positioning in the ICE Futures U.S. Cocoa market. The key theme this week is a deepening of bearish sentiment among speculative and commercial participants, with Swap Dealers absorbing this flow by adding to their substantial net long position. Managed Money significantly increased their net short exposure, primarily by liquidating long positions. Concurrently, Producer/Merchants hold a near-record net short position, indicating heavy producer hedging. Open interest dipped slightly, pulling back from multi-month highs and suggesting a potential consolidation in market activity.

Positioning

• Managed Money (Speculators): The net position for this group shifted more bearish, moving to a net short of -12,462 contracts (22,577 long vs 35,039 short). While this is a clear short stance, it remains less extreme than the -17,106 contract net short seen on May 1.
• Producer/Merchant (Commercials): Commercials hold a very large net short position of -27,443 contracts (48,077 long vs 75,520 short). This is one of the largest net short positions in the provided historical data, which stretches back to December 2025, and points to aggressive and sustained hedging by producers.
• Swap Dealers: This category remains the primary long in the market, holding a substantial net long position of +42,147 contracts (46,944 long vs 4,797 short). This position is near the peak levels seen over the past several months, positioning them as the key counterparty to commercial and speculative shorts.

Flows and week-over-week changes

• Managed Money: This cohort was the most active, registering net selling of 2,550 contracts. The change was driven by a significant liquidation of long positions (-3,920 contracts) which far outweighed modest short-covering (-1,370 contracts). This indicates a strong reduction in bullish conviction.
• Producer/Merchant: Commercials increased their net short position by 1,374 contracts. This came from reducing their outright long hedges (-3,387 contracts) more than they reduced their short hedges (-2,013 contracts).
• Swap Dealers: Swap Dealers were significant net buyers, adding 4,182 contracts to their net long position. The flow was heavily skewed towards adding new longs (+3,801 contracts) while slightly reducing shorts (-381 contracts).

Commercials vs speculators

The market shows a rare alignment where both the primary hedging and speculative groups are positioned net short, though for different reasons. - Commercials are heavily short, reflecting a strong desire to lock in prices for future production. Their net short position of -27,443 contracts has grown dramatically from just -6,188 contracts in late December 2025. - Speculators (Managed Money) are also net short at -12,462 contracts, indicating a bearish directional view on the market. - This leaves Swap Dealers as the principal counterparty, taking the other side of these trades with their +42,147 contract net long position. This highlights their crucial role in providing liquidity to the market's hedgers and speculators.

Open interest and participation

• Total open interest for the week was 193,578 contracts, a minor decrease of 791 contracts.
• While this week's change is small, it marks a continued pullback from the recent peak of 200,360 contracts on May 8.
• Despite the recent dip, overall market participation has expanded significantly since late 2025, when open interest was below 120,000 contracts.
• Position concentration among the largest traders remains moderate. The top 4 net long holders account for 15.3% of the position, while the top 4 net short holders account for 13.5%, figures that are broadly consistent with recent weeks.

Price context

Price series data was not provided for the reporting period. Therefore, this analysis is based solely on positioning data and cannot be directly correlated with market price action.

Risks and watchpoints

• Crowded Shorts: With both Commercials and Managed Money holding significant net short positions, the market may be vulnerable to a sharp short-covering rally should a bullish catalyst emerge.
• Swap Dealer Unwind: The large net long position held by Swap Dealers represents a major source of market support. A change in their behavior, particularly an unwinding of these longs, could remove a key buyer from the market and add to downward pressure.
• Managed Money Long Liquidation: The most significant flow this week was the -3,920 contract reduction in Managed Money longs. Continued liquidation of this remaining long base (22,577 contracts) would be a strong bearish signal. Conversely, a stabilization or rebuilding of these longs could signal a bottoming in speculative sentiment.
• Open Interest Trend: The decline in open interest from the multi-month peak merits attention. A further slide could indicate a broader exodus from the market, whereas a move back toward the highs would suggest renewed speculative and hedging interest.