Coffee Futures COT Brief: Week Ending February 6, 2026

Executive summary

This report covers a highly active week in the Coffee futures market, characterized by a major speculative unwind. Managed Money dramatically reduced its net long position, primarily through aggressive long liquidation, marking a significant reversal from prior weeks. Conversely, Commercials (Producers/Merchants) substantially decreased their net short exposure by adding new longs and covering existing shorts. This divergence occurred as total Open Interest expanded, suggesting new capital entered the market to absorb the speculative selling. The positioning shift signals a potential exhaustion of the recent bullish trend, with commercials viewing price levels as less attractive for new hedging.

Positioning

• Managed Money (MM): The net long position fell sharply to +25,674 contracts. This is a significant reduction from +35,947 contracts in the prior week and marks the smallest net long for this category in the provided six-week history.
• Producer/Merchant (Commercials): The commercial net short position shank to -18,874 contracts, down from -33,035 in the prior week. This is the least net short this category has been over the last six weeks, indicating a substantial reduction in hedging pressure.
• Swap Dealers: This category is now effectively flat, holding a negligible net long of just +37 contracts.
• Overall: The market has moved from a state of strong speculative bullishness vs strong commercial bearishness to a more balanced posture. The gap between MM and Commercial net positions has narrowed considerably.

Flows and week-over-week changes

The week was defined by a massive rotation between speculative and commercial participants. - Managed Money: This group was the primary driver of the week's activity, executing a net sale of 10,273 contracts. This was composed of a very large liquidation of long positions (-7,784 contracts) and the addition of new shorts (+2,489 contracts). Spreading activity also increased by 2,385 contracts. - Producer/Merchant: Commercials were the primary buyers, adding a net 14,161 contracts to their position. This was a powerful combination of aggressive new long buying (+9,124 contracts) and significant short covering (-5,037 contracts). - Other Reportables: This category turned more bearish, adding 4,105 short contracts against a negligible change in longs.

Commercials vs speculators

The classic positioning divergence between commercials and speculators saw a dramatic shift this week. - Speculators Unwind: The Managed Money long liquidation (-7,784 contracts) is the standout flow, suggesting profit-taking or a loss of bullish conviction. Their net long position of +25,674 contracts, while still bullish, is substantially less extended than the +35,947 level seen a week prior. - Commercials Step In: The sharp reduction in the commercial net short position to -18,874 contracts is a strong signal. This group, representing physical market participants, used the period to both establish new longs and lift existing hedges, a move that is typically seen as supportive for prices.

Open interest and participation

• Open Interest (OI): Total market participation grew, with OI increasing by 4,683 contracts to a total of 179,573. This is the highest OI level in the provided six-week period.
• Participation Dynamics: The rise in OI during a week of heavy speculative selling is notable. It indicates that the substantial buying from commercials more than absorbed the fund liquidation, with new positions being established on both sides of the market.
• Concentration: Market concentration remains moderate. The largest 4 traders control 10.0% of the net short side, while the largest 8 traders control 17.6%. These levels do not suggest an overly concentrated or fragile market structure.

Price context

Note: No daily price data was provided for this reporting period. While we cannot directly correlate positioning changes with price action, the observed flows provide strong inferential clues. A large-scale long liquidation event from Managed Money, as seen this week, is often associated with a period of price weakness or a sharp downward correction. Speculators may have been taking profits after a run-up or cutting losses on a price decline. The concurrent short-covering and new long buying from commercials would be consistent with them viewing lower prices as an opportunity to lift hedges and secure supply.

Risks and watchpoints

• Speculative Follow-Through: The key question is whether this week's Managed Money selling was a one-time profit-taking event or the beginning of a larger trend reversal. A continuation of long liquidation in next week's report would signal a more durable shift in sentiment.
• Commercial Support: The significant reduction in the commercial net short position could act as a stabilizing force. If producers and merchants continue to be active buyers on any price dips, it could establish a floor in the market. Their current position is the least bearish in over a month.
• Crowded Trade Cleared: The aggressive unwind has cleared out a significant portion of the "crowded" speculative long trade. This paradoxically could reduce the fuel for further sharp sell-offs and allow the market to consolidate. The market is now in a more balanced state between bulls and bears.