Coffee C - Commitments of Traders Brief - Week Ending 2026-02-13

Executive summary

This week's report reveals a significant bearish shift among speculators, starkly contrasting with bullish activity from commercial participants. Managed Money aggressively reduced its net long position to the lowest level in at least seven weeks, primarily by initiating a large number of new short positions. In a classic mirror image, Producer/Merchants heavily covered their short hedges, reducing their net short position to its smallest since late December. This divergence occurred alongside a drop in overall open interest, suggesting a combination of long liquidation and fresh short selling from funds was met by producer buy-backs. The market dynamic has shifted from a speculatively-led long trend to a more contested environment.

Positioning

• Managed Money Net Long: The speculative net long position held by Managed Money fell sharply to +19,077 contracts. This is a significant reduction from +25,674 contracts last week and is the lowest net long position recorded in the provided seven-week history, well off the +35,947 peak seen in late January.
• Producer/Merchant Net Short: Commercials dramatically reduced their net short position to -13,922 contracts from -18,874 last week. This is the least net-short they have been in the available data, a major reversal from the -33,035 net short position held just two weeks prior.
• Swap Dealers: This category flipped from a marginal net long position of +37 contracts to a marginal net short of -437 contracts. Their positioning remains relatively balanced and does not indicate a strong directional bias.

Flows and week-over-week changes

The reporting week was characterized by large, opposing flows between key categories: - Managed Money: Executed a decisive bearish move. They liquidated 1,791 long contracts while simultaneously adding 4,806 new short contracts. This represents a net selling pressure of 6,597 contracts. - Producer/Merchant: Provided the main counterbalance, exhibiting bullish behavior. They covered a substantial 5,188 short contracts while making only a minor reduction of 236 long contracts, resulting in a net buying of 4,952 contracts. - Other Reportables: Also showed a bullish tilt, adding 709 longs and cutting 1,455 shorts, for a net buying of 2,164 contracts. - Non-Reportable (Retail): Showed minor activity, trimming 351 longs and 306 shorts.

Commercials vs speculators

The classic positioning dichotomy remains, but the gap has narrowed considerably. - Speculators (Managed Money + Other Reportables): The speculative side is still net long, but their conviction has waned. The combined net long position fell significantly, driven entirely by the aggressive selling from Managed Money. - Commercials (Producer/Merchant + Swap Dealers): The commercial net short position shank notably. The large-scale short covering by Producers suggests they either see current prices as a value level to remove hedges or are fulfilling physical delivery needs. This group absorbed a significant portion of the speculative selling.

Open interest and participation

• Open Interest: Total open interest declined by 4,529 contracts to 175,044. A drop in open interest concurrent with heavy speculative selling often signals long liquidation, which is consistent with Managed Money's reduction in long positions.
• Participation: The number of traders in most categories remained relatively stable. The number of Managed Money short traders increased from 47 to 52, reflecting the addition of fresh shorts.
• Concentration: Market concentration remains moderate. The largest four traders now account for 11.1% of the net long position (up from 10.2% last week) and 9.9% of the net short. The largest eight traders hold 17.6% of the net long and 16.4% of the net short. There are no signs of excessive concentration.

Price context

Price series data was not available for this reporting period. However, the positioning changes strongly imply a bearish price move occurred during the week ending February 13. The combination of Managed Money liquidating longs and adding new shorts, met by Producer short-covering, is classic behavior during a price decline where speculators capitulate or press their advantage, and commercials see value in removing hedges.

Risks and watchpoints

• Speculative Selling vs. Commercial Buying: The primary watchpoint is the stark divergence between fund selling and producer buying. If this was a one-off speculative washout, the reduction in the net long position could remove fuel for further declines and form a base. If funds continue to press the short side, the market will test the commercial appetite to continue buying.
• Managed Money Follow-Through: The addition of over 4,800 new shorts by Managed Money is significant. The key question is whether this is the start of a new bearish trend or a short-term positioning adjustment. Their activity in the next report will be critical.
• Producer Hedging Levels: The Producer net short position is now at a multi-week low. A continued reluctance to re-hedge on any price strength would be a bullish signal, suggesting they are comfortable with price levels. Conversely, a return to heavy shorting on a price bounce would indicate they are simply hedging opportunistically and could cap potential rallies.