Coffee (ICE) COT Brief: Week Ending 2026-05-22

Executive summary

This week's report reveals a significant sentiment shift among speculators, even as overall market participation surged to its highest level in over five months. Managed Money aggressively reduced its net long position, driven by both long liquidation and a substantial increase in new short-selling. This bearish turn from speculators was met with strong buying from the Producer/Merchant category, which significantly reduced its net short hedge. The sharp rise in open interest alongside this divergence points to a contentious market and raises the potential for increased volatility.

Positioning

• Managed Money Net Position: The speculative net long position fell sharply to +24,586 contracts. This is a significant reduction from +30,370 contracts the prior week and is a move away from the more extreme bullish positioning seen earlier in the year (e.g., +35,313 in late December).
• Producer/Merchant (Commercial) Net Position: Commercials reduced their net short position to -20,831 contracts, compared to -25,629 last week. This is the smallest net short position held by this category in the provided data, indicating significant buying or hedge-lifting activity.
• Swap Dealers Net Position: Swap Dealers hold a modest net long position of +5,450 contracts, a slight increase from the prior week.

Flows and Week-over-Week Changes

The market saw a major reshuffling of positions on a significant increase in open interest. - Managed Money: This category was the primary driver of the week's activity. They liquidated 1,769 long contracts while simultaneously adding a substantial 4,015 new short contracts. This two-pronged bearish move resulted in a net position change of -5,784 contracts. - Producer/Merchant: In a direct counterbalance to speculators, commercials were strong net buyers. They added a significant 4,699 long contracts and trimmed 99 short contracts, improving their net position by 4,798 contracts. - Open Interest: Total open interest surged by 7,568 contracts. This influx of new positions, rather than a simple transfer, underscores the new conviction from both bears (Managed Money shorts) and bulls (Producer longs).

Commercials vs Speculators

A classic divergence is now in play between the market's largest participants. - Speculators (Managed Money) have shifted their outlook considerably, moving from a strongly bullish stance to a more neutral-to-bullish one. The addition of over 4,000 new short contracts is the most bearish signal from this group in months. - Commercials (Producer/Merchant) are sending a strong bullish signal. Their aggressive buying has reduced their net short hedge to the lowest level in the provided historical context, suggesting they see value or are responding to physical market tightness at current price levels. This tug-of-war between the two key groups is a primary theme.

Open Interest and Participation

• Total Open Interest: At 189,817 contracts, OI is now at its highest level since at least December 2025. The sharp weekly increase confirms that new capital is actively entering the coffee market, fueling the divergent views between speculators and commercials.
• Concentration: The market does not appear to be overly concentrated among the largest traders. The top 4 firms account for 12.3% of the net long and 9.3% of the net short position. The top 8 firms hold 19.2% and 15.6% respectively.

Price Context

Price series data was not provided for this reporting period. Therefore, a direct correlation between the significant positioning changes and underlying price action cannot be established from the available data. The analysis is based solely on the reported positions.

Risks and Watchpoints

• Speculative Selling Pressure: The primary watchpoint is whether the new short-selling by Managed Money represents the beginning of a larger trend reversal or was simply a one-off wave of profit-taking. Continued selling from this group could exert significant downward pressure on prices.
• Commercial Support: The scale of buying from Producers/Merchants cannot be ignored. Their activity may provide a significant support level for the market, absorbing speculative selling. The clash between these two powerful forces is likely to define market direction in the near term.
• Elevated Volatility: The combination of record-high open interest and a stark divergence in positioning between commercials and speculators creates a fertile ground for heightened volatility. Any sharp price move could trigger a cascade of stops from a large and newly-established base of positions.