Coffee C Futures (ICE) - COT Report for week ending 2026-03-06

Executive summary

This report reveals a significant divergence between commercial and speculative players in the Coffee market. Speculators, specifically Managed Money, have reduced their net long position to the lowest level in the provided 10-week history, indicating a strong trend of profit-taking or long liquidation. Conversely, Producer/Merchants (Commercials) have covered their short hedges to a near-10-week low, suggesting they see value at current levels. This classic tug-of-war, with commercials buying from exiting specs, often precedes a market bottom. The increase in Open Interest this week suggests new capital is entering, which will be critical in determining the market's next direction.

Positioning

• Managed Money (Funds): The net long position fell slightly to +16,465 contracts (37,319 long vs. 20,854 short). This marks a new 10-week low and a significant unwind from the peak net long of +35,947 contracts seen in late January. The speculative bullish conviction has clearly faded over the past month.
• Producer/Merchant (Commercials): This group holds a net short position of -15,903 contracts (43,086 long vs. 58,989 short). This is among the least-bearish positions in the recent dataset, representing a major reduction from the peak net short of -33,035 contracts in late January. Commercials have been consistent buyers on weakness.
• Swap Dealers: This category has become increasingly bullish, posting a net long of +5,063 contracts. This is their largest net long position in the provided history, extending a trend of flipping from net short to net long over the past three weeks.

Flows and week-over-week changes

• Managed Money: A quiet week of adjustment saw a net position decrease of just 391 contracts. This was composed of minor long liquidation (-376 contracts) and marginal new short positions (+15 contracts). The aggressive selling from this group appears to be pausing.
• Producer/Merchant: Commercials actively reduced their net short stance. They added a substantial 2,348 new long positions while also adding 1,891 short hedges, for a net buying of 457 contracts.
• Swap Dealers: This group showed the strongest directional buying, adding 1,414 long contracts while trimming 263 shorts. Their increased net long position absorbed speculative selling.
• Overall Market: Open Interest saw a healthy increase of +5,194 contracts, signaling renewed engagement after a lull in late February.

Commercials vs speculators

The classic positioning divergence is in full effect. - Speculators, led by Managed Money, have been the primary sellers for over a month, liquidating a once-crowded long position. Their net length has been more than halved since its peak. - Commercials have been on the opposite side of that trade, consistently covering short hedges and reducing their net short exposure. This implies a perception that current price levels are attractive for end-users or that producers are less inclined to hedge forward production aggressively.

Open interest and participation

• Total Open Interest stands at 169,433 contracts, recovering from a dip to 156,645 contracts two weeks prior. This week's rise suggests the market is attracting new interest rather than just seeing participants exit.
• The total number of reporting traders is stable at 357.
• Market concentration remains moderate. The four largest traders by net position account for 11.3% of long positions and 9.2% of short positions.

Price context

• Price series data was not provided for this reporting period.
• However, the positioning changes strongly imply a period of price weakness preceding this report. The significant long liquidation from Managed Money and the aggressive short-covering from Commercials are classic footprints of a market that has been in a downtrend. Commercials are acting as value buyers, while trend-following funds have been forced to exit.

Risks and watchpoints

• Speculative Exhaustion: Managed Money's net long position is now at a multi-month low. If this long liquidation is nearly complete, a major source of selling pressure could be removed from the market, creating the potential for a short-covering rally.
• Commercial Support: The persistence of commercial buying is a key supportive factor. A continuation of this trend would reinforce the idea of a price floor being established. Conversely, if commercials begin to add aggressively to short hedges again, it would signal their value targets have been met.
• Swap Dealer Stance: The growing net long position of Swap Dealers, who often facilitate commercial hedging, confirms the strong commercial buying flow. This group turning back to net short would be a warning sign.
• Follow-Through in Open Interest: The rebound in Open Interest is a positive sign. For a sustainable rally to occur, we would need to see Open Interest continue to rise alongside any potential price increase, which would signal new buyers are entering the market with conviction.