Coffee C Futures & Options - COT Report (Week ending 2026-07-24)

Executive summary

Speculative and commercial forces remain in a significant standoff in the Coffee market. Managed Money maintains a substantial net long position of +33,219 contracts, signaling strong bullish conviction. This is directly mirrored by a deeply net short Producer/Merchant position of -30,410 contracts, indicating extensive hedging by the commercial sector. The reporting week was characterized by a reduction in overall market participation, with Open Interest falling by 3,786 contracts. Positioning changes were minor, with Managed Money slightly increasing their net long bias primarily through short-covering, while Commercials also modestly reduced their net short hedges. The market remains coiled, with the large speculative long position posing a risk of liquidation should sentiment turn.

Positioning (net, extremes vs recent weeks)

• Managed Money (Speculators): Net long position now stands at +33,219 contracts (42,841 long vs 9,622 short). This is a slight increase from the prior week's +32,834 contracts and remains near the upper end of the range seen in recent months. The position is well above the levels seen in February-March but below the +35.9k peak from late January.
• Producer/Merchant (Commercials): Net short position is -30,410 contracts (32,444 long vs 62,854 short). This represents a slight reduction in hedging from the prior week's -30,724 contracts. This level of commercial shorting is substantial, reflecting a strong view that current prices are favorable for hedging future production.
• Swap Dealers: Positioned slightly net long at +1,321 contracts (26,208 long vs 24,887 short). This is a very modest net position, suggesting they are primarily facilitating client flows rather than taking a strong directional view.

Flows and week-over-week changes

This was a week of consolidation and position reduction, as reflected in the decline in open interest. * Managed Money: The net long position increased by a marginal +385 contracts. This was driven more by short-covering (shorts fell by 752 contracts) than by new long initiation (longs fell by 367 contracts). This suggests a slight decrease in outright bearish bets rather than a fresh wave of bullish enthusiasm. * Producer/Merchant: Reduced their net short stance by a small +314 contracts. This was the result of liquidating both long (-1,649 contracts) and short (-1,963 contracts) positions, with the larger exit from shorts leading to the net change. * Swap Dealers: Showed minimal change, slightly increasing their net long position by just +47 contracts. * Overall Market: The most significant flow was an exit of capital from the market, with total Open Interest falling by 3,786 contracts.

Commercials vs speculators

The classic divergence between commercials and speculators continues to define the Coffee market structure. * Speculators (Managed Money) are positioned for higher prices, holding one of their largest net long positions of the past several months. Their longs (42,841) outnumber their shorts (9,622) by more than a 4-to-1 ratio. * Commercials (Producer/Merchant) are heavily positioned for flat or lower prices, using the futures market to lock in prices for their physical product. Their short positions (62,854) are nearly double their long positions (32,444). * This extreme divergence implies a strong disagreement on future price direction and sets the stage for significant volatility. A resolution will likely occur when one side is forced to unwind its position.

Open interest and participation

• Open Interest: Total open interest declined to 163,057 contracts, down 3,786 from the previous week. This continues a broader trend of declining participation from the peak of over 213,000 contracts seen in mid-June, suggesting a sustained period of liquidation and lack of new market entrants.
• Concentration: The market does not appear to be overly concentrated. The four largest traders hold 9.1% of the net long position and 12.2% of the net short position. The eight largest traders hold 15.9% and 19.6% of the net long and short positions, respectively. These figures are not at levels that would suggest a market corner.

Price context

No price data was provided for this reporting period. Therefore, it is not possible to correlate these positioning changes with price action. We cannot determine if the short-covering from speculators occurred during a price rally or a dip, which limits a full interpretation of their actions.

Risks and watchpoints

• Crowded Speculative Long: The large and persistent Managed Money net long position is the primary market risk. A negative catalyst could trigger a rapid and cascading long liquidation, leading to a sharp price decline.
• Commercial Short Fuel: The substantial Producer/Merchant net short position could act as fuel for a rally. Any bullish developments could force a wave of short-covering as commercials buy back their hedges, exaggerating upward price moves.
• Declining Liquidity: The steady decrease in Open Interest since mid-June is a key watchpoint. It signals that capital is leaving the market, which can reduce liquidity and potentially increase volatility on any significant news or order flow. The bullish trend, if there is one, is being supported by a shrinking pool of participants.