Coffee (COFFEE C) - COT Brief for Week Ending 2026-04-24

Executive summary

This week's report reveals a market in a de-risking phase, characterized by a significant drop in overall participation and conflicting flows between major players. Managed Money reduced their net long position, driven by a substantial build in new short positions, hinting at a potential shift in speculative sentiment. Concurrently, Commercials (Producers/Merchants) significantly reduced their net short hedge by covering a large block of short contracts. This concurrent reduction of risk from both sides, coupled with a second consecutive sharp decline in open interest, suggests traders are closing out positions and taking profits rather than initiating a new directional trend.

Positioning

• Managed Money: The net long position for speculators decreased to +27,080 contracts. This is down from last week's +29,570 and is well below the year-to-date highs of over +35,000 contracts seen in January. While still a historically bullish stance, the position has been trending lower over the last month.
• Producers/Merchants: Commercials hold a net short position of -25,320 contracts. This is a significant reduction from their -28,401 net short position last week, marking their least bearish stance in the last three weeks.
• Swap Dealers: This category remains net long at +6,734 contracts, a slight increase from the prior week. Their position provides liquidity but is less indicative of outright directional views compared to Managed Money.

Flows and week-over-week changes

• Managed Money: The reduction in the net long position was not driven by long liquidation but rather by aggressive new short-selling. Speculators added a modest 359 long contracts but piled on 2,849 new short contracts. This is a bearish signal, suggesting either profit-taking via short hedges or a growing belief that the top may be in.
• Producers/Merchants: Commercials were significant buyers this week, primarily by covering existing hedges. They liquidated 4,649 short contracts while also reducing their long positions by 1,568 contracts. The net effect was a reduction of their net short exposure by 3,081 contracts, a potentially bullish signal as it implies less producer selling pressure.
• Non-reportable: Small speculators also appeared to de-risk, with long and short positions falling by 979 and 1,160 contracts, respectively.

Commercials vs speculators

The classic positioning structure of bullish speculators against bearish commercial hedgers remains, but the conviction on both sides appears to be waning. This week, the gap between the two narrowed significantly. Managed Money became less bullish (reducing their net long) while Commercials became less bearish (reducing their net short). This simultaneous retreat from peak positioning suggests uncertainty and a potential consolidation phase for the market.

Open interest and participation

• Open Interest (OI): Total market participation saw a significant decline, with OI falling by 5,693 contracts to 162,870. This comes on the heels of a 7,577 contract drop in the previous week, marking a two-week liquidation of over 13,000 contracts and a clear sign of capital leaving the market.
• Trader Counts: The number of Managed Money short traders jumped from 32 to 42, confirming that the new short positions are from an expanding group of participants. Conversely, the number of long-side Managed Money traders fell from 71 to 65.
• Concentration: The market remains moderately concentrated. The top 4 largest traders control 12.4% of the longs and 12.1% of the shorts. The top 8 traders account for 20.5% and 18.9% of the long and short positions, respectively. These figures are stable compared to recent weeks.

Price context

Price series data for the corresponding period was not provided. Therefore, a direct correlation between these positioning changes and market price action cannot be established. However, a significant, multi-week liquidation in open interest often follows a strong directional price move, suggesting traders are taking profits or being forced to close positions after a period of high volatility.

Risks and watchpoints

• Managed Money Short Build: The large addition of +2,849 short contracts by speculators is the most significant development this week. It is critical to watch if this trend continues, as it could signal a major reversal in speculative sentiment from bullish to bearish.
• Commercial Hedge Reduction: The large-scale short covering by producers (-4,649 contracts) reduces a key source of selling pressure on the market. If this behavior continues, it could provide a floor for prices.
• Continued Liquidation: The sharp drop in open interest is a major watchpoint. Continued declines would suggest the market's recent trend is exhausted. A stabilization or build in OI, coupled with a renewed push from either speculators or commercials, would be needed to signal the start of a new, sustainable move.