Coffee COT Report for the week ending 2026-05-29

Executive summary

This report reveals a significant shift in sentiment, with speculative players reducing their bullish exposure while commercial participants concurrently eased their hedging pressure. Managed Money's net long position fell to a multi-week low, driven by both long liquidation and new short positions. In a mirror image, Producer/Merchant net short positions are the smallest they have been in the provided historical data, indicating a reduction in forward selling or active short-covering. Total market participation, as measured by open interest, surged to a new high for the period, suggesting that despite the spec profit-taking, the market remains a key focus for traders.

Positioning

• Managed Money: The speculative net long position now stands at +22,973 contracts (44,090 long vs 21,117 short). This is a notable decrease from the +34,843 net long held in early May and marks the lowest net long holding in over two months.
• Producer/Merchant: Commercials hold a net short position of -21,414 contracts (44,691 long vs 66,105 short). This is the smallest net short position in the entire historical dataset provided, significantly less bearish than the -32,058 net short seen in early May. This implies a substantial reduction in hedging activity.
• Swap Dealers: This group maintains a net long of +4,648 contracts (26,565 long vs 21,917 short), acting as a partial offset to the commercial short position.

Flows and week-over-week changes

The reporting week was characterized by speculative selling and increased two-way flow from commercials. - Managed Money was a net seller of 1,613 contracts. This was composed of a reduction in long positions (-1,017 contracts) and the addition of new short positions (+596 contracts), a bearish signal of profit-taking and some conviction on the short side. - Producer/Merchants increased both their long and short books, adding 1,151 long contracts and a larger 1,734 short contracts. This resulted in a modest increase in their net short position for the week (-583 contracts), though the broader trend remains one of short-covering. - Swap Dealers also turned more bearish, reducing their net long position by 802 contracts, primarily through the addition of new shorts (+657 contracts).

Commercials vs speculators

The classic positioning dynamic of speculative longs versus commercial shorts remains intact, but the recent trend is the most critical takeaway. The divergence between these two key groups is pronounced: - Speculators (Managed Money) are clearly reducing their bullish exposure. After building a large net long position through March and April, they have been net sellers for several consecutive weeks. The current net long of +22,973 contracts, while still bullish, is down over 34% from its early May peak. - Commercials (Producer/Merchant) are showing the least hedging pressure in months. Their shrinking net short position suggests that producers are either content with recent price levels and have reduced their forward selling, or they have been actively buying back hedges. This reduction in persistent selling pressure is a structurally supportive factor.

Open interest and participation

• Open Interest (OI) rose by 3,831 contracts to a total of 193,648 contracts. This is the highest level of open interest in the provided data history, indicating very high engagement and liquidity in the coffee market. Rising OI during a period of spec long liquidation can be a sign of distribution or a market top, as new participants take the other side of spec selling.
• Trader Counts: The market involves a broad base of 354 total reporting traders. Managed Money participation is significant, with 56 long traders and 57 short traders.
• Concentration: The market is not overly concentrated. The largest 4 traders hold 12.1% of the net long position and 9.2% of the net short position. These ratios are stable and do not suggest undue influence by a small number of players.

Price context

Price series data was not provided for this reporting period. Therefore, a direct correlation between positioning changes and daily price action cannot be established. The analysis is based exclusively on the commitment of traders' data.

Risks and watchpoints

• Speculative Unwind: The primary watchpoint is the continued reduction of the Managed Money net long position. At +22,973 contracts, it is still a large position. An acceleration of this long liquidation could exert significant downward pressure on prices.
• Commercial Re-hedging: Monitor Producer/Merchant activity closely. If they begin to significantly increase their short positions again, it would signal a return of hedging pressure, potentially capping any price rallies.
• High Open Interest: The peak in open interest combined with spec selling creates a risk of heightened volatility. If a price decline were to accelerate, the large number of participants could lead to a rapid and disorderly exit from long positions.