Coffee C Futures COT Report for the week ending December 23, 2025

Executive summary

This week's report reveals a significant divergence between speculative and commercial players in the Coffee market. Managed Money (speculators) sharply reduced their net long position, primarily through long liquidation, suggesting profit-taking or a turn in sentiment. Conversely, Producer/Merchants (commercials) dramatically cut their net short hedges, indicating they see less need for downside price protection. This occurred as overall market participation, measured by Open Interest, declined, pointing to an exit of capital rather than the establishment of a new directional trend. The lack of historical positioning and recent price data limits the ability to place these moves in a broader context.

Positioning

• Managed Money: This speculative category remains significantly bullish, holding a net long position of 35,313 contracts (47,352 long vs. 12,039 short).
• Producer/Merchant: As the primary hedgers, this group holds a substantial net short position of -25,416 contracts (32,461 long vs. 57,877 short).
• Swap Dealers: This category holds a modest net short position of -5,257 contracts.
• Extremes: Without data from prior weeks, it is not possible to determine if these net positions represent historical extremes for any category.

Flows and week-over-week changes

The most significant activity this week was the transfer of risk between speculators and commercials.

• Managed Money were heavy net sellers, reducing their net long position by 3,291 contracts. This was driven by a combination of significant long liquidation (-2,400 contracts) and new short selling (+891 contracts).
• Producer/Merchants were the primary buyers, covering a large number of shorts and reducing their net short position by 5,327 contracts. The move was dominated by a substantial decrease in short positions (-4,312 contracts), supplemented by some fresh long positions (+1,015 contracts).
• Other Reportables added to the bearish pressure, increasing their net short position by selling a net 1,552 contracts.
• Swap Dealers made only minor adjustments, becoming slightly less net short by a net 256 contracts.

Commercials vs speculators

The classic dynamic of speculators being long against commercial shorts is clearly in place. However, the weekly flows show a stark contrast in behavior.

• Speculators (Managed Money) are taking profits or reducing bullish exposure. The selling of 2,400 long contracts suggests an exit from previously established bullish bets.
• Commercials (Producer/Merchants) are actively reducing their downside hedges. The covering of 4,312 short contracts is a potentially bullish signal, suggesting that producers either see lower price risk or believe prices have fallen to a level where hedging is less necessary. This divergence is a key feature of this week's report.

Open interest and participation

• Total Open Interest (OI) fell by 3,276 contracts to a new total of 160,631. A decrease in OI alongside long liquidation from the largest speculative group often signifies a tired trend where participants are closing out positions rather than initiating new ones.
• Participation: Managed Money accounts for a significant portion of the market, holding 29.5% of all long positions. Producers hold the largest share of the short side, at 36.0% of total OI, which is typical for a producer-dominated commodity.
• Concentration: The market is moderately concentrated. The 4 largest traders control 10.8% of the long side and 12.4% of the short side. The 8 largest traders control 18.6% and 21.2% of the long and short sides, respectively, indicating slightly higher concentration among the largest short position holders.

Price context

The provided price_series data is empty. Therefore, it is not possible to correlate these significant positioning changes with specific daily price action. The large reduction in Managed Money longs could be a reaction to either a sharp rally (profit-taking) or a breakdown in price (stopping out). Similarly, the commercial short-covering could be a response to falling prices making hedges less critical. Without price data, this context is unavailable.

Risks and watchpoints

• Speculator vs. Commercial Divergence: The primary watchpoint is the conflicting action between speculators selling and commercials buying (by covering shorts). This suggests disagreement on market direction and could lead to volatility. Future reports will be critical to see which group continues its trend.
• Managed Money Longs: While reduced this week, the net long position of +35,313 contracts is still substantial. These positions remain a source of potential selling pressure if market sentiment turns decisively negative.
• Follow-through on OI: A continued decline in Open Interest would suggest the market is in a corrective or consolidative phase. Conversely, a pickup in OI alongside renewed speculative buying or selling would signal the start of a new directional move.