HRW Wheat Futures - COT Report for week ending February 20, 2026

Executive summary

This week's report captures a significant shift in sentiment amid a strong price rally in the HRW Wheat market. Speculators, led by Managed Money, aggressively covered short positions and initiated new longs, fueling the move to multi-month highs. This buying was met with heavy selling from Commercials, who used the price strength to increase their hedge book. Open interest rose notably, indicating new capital entering the market and adding conviction to the recent price action. The key dynamic is a classic clash between bullish speculators and price-taking commercial hedgers.

Positioning

• Managed Money (Funds): Net position is now short -11,095 contracts. This is a dramatic reduction from last week's -18,012 net short and marks the least bearish fund positioning seen in the past two months. The gross short position of 79,487 contracts remains significant, but the gross long has increased to 68,392.
• Producer/Merchant (Commercials): Net position deepened to -62,795 contracts, a substantial increase in their net short from -52,568 in the prior week. This reflects aggressive hedging activity and positions them as the primary sellers at current price levels.
• Swap Dealers: Maintained a very large net long position of +74,802 contracts, down slightly from +76,127 last week. They continue to act as the main counterparty to the large commercial short base.
• Other Reportables: Flipped from a net short to a net long position of +3,932 contracts, adding to the speculative buying pressure.

Flows and week-over-week changes

The market saw a significant inflow of new positions, with key participants taking opposing sides. - Managed Money was the standout buyer, with a net change of +6,917 contracts. This was driven by a powerful combination of adding 3,359 new long contracts and, more importantly, covering 3,558 short contracts. - Producer/Merchant entities were the primary sellers, increasing their net short position by 10,227 contracts. This flow consisted of liquidating 5,071 long positions while simultaneously adding 5,156 new shorts. - Open Interest saw a healthy increase of 8,984 contracts. A rise in open interest alongside a price rally is typically viewed as a confirmation of the trend, suggesting new money is supporting the move higher.

Commercials vs speculators

This week highlighted a sharp divergence between commercial and speculative players. - Speculators (Managed Money and Other Reportables) were clear buyers, likely responding to or driving the price rally. The significant short-covering from funds suggests a potential pain point was reached, forcing a capitulation on bearish bets. - Commercials acted as would be expected, using the price rally as an opportunity to sell forward production and lock in favorable prices. Their willingness to add over 10,000 contracts of net short exposure underscores their view of value at these levels. - This creates a classic tug-of-war: speculator momentum versus commercial hedging pressure.

Open interest and participation

• Total open interest rose to 304,868 contracts, a solid level and a notable increase from the prior week, suggesting strong engagement.
• The market remains well-diversified. Concentration ratios show that the four largest traders by net position hold 12.0% of the long side and 10.4% of the short side. This indicates that the positioning is not dangerously concentrated in the hands of a few major players.
• The total number of reporting traders was stable at 263.

Price context

The positioning changes align perfectly with the provided price series. - During the reporting period (from the close of Feb 13 to Feb 20), the front-month HRW Wheat contract staged a strong rally, closing at 564.5 cents per bushel. This was a significant gain from the prior week's close of 552.75 and marks the highest closing price in the provided data series. - The aggressive net buying from Managed Money (+6,917 contracts) was a clear driver of this price strength. The combination of short-covering and new longs created powerful upward momentum.

Risks and watchpoints

• Further Short Squeeze: While Managed Money has reduced its net short position, they still hold nearly 80,000 gross short contracts. If the price continues to rally, these remaining shorts could be forced to cover, creating a feedback loop that could propel prices even higher.
• Commercial Headwind: The substantial increase in commercial short positions (now net short -62,795 contracts) represents a significant wall of supply. These hedgers may continue to sell into any further strength, potentially capping the rally's upside.
• Sentiment Shift: The key factor to watch in next week's report is whether Managed Money continues to buy and potentially flips to a net long position. Such a move would confirm a major shift in speculative sentiment from bearish to bullish. The balance between their buying appetite and the commercials' willingness to sell will likely dictate the market's next major move.