Sugar No. 11 Futures - COT Brief for the week ending February 20, 2026

Executive summary

This report covers positioning in the Sugar No. 11 futures market as of February 20, 2026. The dominant theme is a significant and growing divergence between speculators and commercial hedgers. Managed Money extended its net short position to the largest level in recent months, driven by an aggressive build-up of new short positions. This signals strong bearish conviction among trend-following funds. Conversely, Producer/Merchants hold a historically large net long position, indicating they view current price levels as attractive for locking in future needs. Open interest continued to climb to new highs, suggesting fresh capital is entering the market to take sides in this standoff. The extreme speculative short position represents a significant risk of a short-covering rally should market sentiment shift.

Positioning (net, extremes vs recent weeks)

• Managed Money (Speculators): Net position deepened to -231,762 contracts, a significant increase from -200,034 contracts the prior week. This is the largest net short position seen in the provided historical data dating back to late December.
• Producer/Merchant (Commercials): Net position stands at +75,402 contracts, slightly down from last week's peak of +84,850 but still representing one of the largest net long positions in the past two months. This suggests strong hedging or buying interest from physical market participants.
• Swap Dealers: Hold a substantial net long position of +190,422 contracts, up from +173,559 contracts last week. This group is often providing liquidity and taking the other side of producer or speculative trades.

Flows and week-over-week changes

The reporting week saw a notable increase in bearish bets from speculators. - Managed Money: The net short position grew by 31,728 contracts. This move was not driven by long liquidation but by a substantial addition of new shorts (+35,210 contracts) against a modest addition of new longs (+3,482 contracts). This reflects an active increase in bearish bets. - Producer/Merchant: This group slightly reduced its net long stance, with the net position changing by -9,448 contracts. This was the result of adding more new short hedges (+10,289 contracts) than new long positions (+841 contracts). - Swap Dealers: Increased their net long position by 16,863 contracts. This was achieved by adding longs (+4,674 contracts) and, more significantly, by cutting their short exposure (-12,189 contracts).

Commercials vs speculators

The market positioning is characterized by a classic and pronounced divergence: - Speculators are overwhelmingly bearish: The Managed Money net short position of -231,762 contracts is at a multi-week extreme, with 72 reporting short traders versus only 40 long traders. Their gross short position (363,278 contracts) dwarfs their gross long position (131,516 contracts). - Commercials are firmly bullish/hedging: The Producer/Merchant net long position of +75,402 contracts indicates that entities with underlying physical exposure to sugar are buying futures, likely to hedge future needs or lock in input costs at what they perceive to be favorable levels. Their gross longs (356,926 contracts) significantly outweigh their gross shorts (281,524 contracts).

This large-scale disagreement often precedes significant price moves, as one side will eventually be proven wrong.

Open interest and participation

• Total Open Interest: Increased slightly by 3,904 contracts to 1,099,675 contracts. This is the highest level of open interest in the provided data set, indicating growing participation and liquidity in the Sugar market.
• New Money: The combination of rising open interest and a large increase in Managed Money gross short positions suggests that new capital is entering the market to establish fresh bearish positions.
• Concentration: Market concentration among the largest traders remains stable. The top four largest traders by net position account for 12.5% of the short side and 12.8% of the long side, figures that are broadly in line with recent weeks.

Price context

Price series data was not provided for this reporting period. Therefore, a direct correlation of positioning changes with price action cannot be performed. The analysis is based solely on the positioning data.

Risks and watchpoints

• Crowded Short Trade & Squeeze Risk: The Managed Money net short position is now at an extreme level. This creates a significant risk of a "short squeeze." Any unexpected bullish news could trigger a rapid unwind of these short positions, causing a sharp price rally as shorts rush to buy back their contracts.
• Commercial Support: The large net long position held by Commercials can be seen as a source of underlying support for the market. These participants are price-sensitive buyers and are likely to increase their buying on any further price weakness.
• Swap Dealer Absorption: Swap Dealers continue to absorb speculative selling, as evidenced by their growing net long position. Their capacity to continue doing so could influence near-term price stability. Watch their positioning for any signs of unwinding their long exposure, which could add to selling pressure.