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Cotton COT — Week of October 9, 2026

Cotton COT Report: Week Ending October 9, 2026

Executive Summary

The CFTC Disaggregated Commitments of Traders report for Cotton (CT) futures for the week ending October 9, 2026, highlights continued liquidation by speculative longs alongside heavy commercial short hedging. Managed Money slashed gross long exposure by 9,979 contracts while modestly increasing shorts (+740 contracts), reducing their net long position to 57,118 contracts. This marks the fifth consecutive week of net long shrinkage from early September peaks above 100,000 contracts. Total open interest declined by 7,264 contracts week-over-week to 382,230 contracts, signaling speculative long profit-taking or de-risking rather than aggressive fresh short-selling. Commercials (Producer/Merchant/Processor/User) retain a massive net short stance of -146,736 contracts, anchoring the short side of the market.

Positioning (Net, Extremes vs Recent Weeks)

Positioning across the major participant categories for all contract months as of October 9, 2026:

  • Managed Money:
    • Gross Long: 74,374 contracts (19.5% of open interest)
    • Gross Short: 17,256 contracts (4.5% of open interest)
    • Spreading: 43,392 contracts (11.4% of open interest)
    • Net Position: +57,118 contracts
    • Historical Context: Managed Money net positioning has experienced a significant regime shift in 2026. After starting the year heavily net short (bottoming near -76,513 contracts on February 13, 2026), funds flipped decisively net long by mid-April and peaked at +100,963 contracts on September 4, 2026. The current net long of 57,118 is the lowest since late April 2026 (+31,329 net long on April 24), reflecting substantial position trimming.
  • Producer/Merchant/Processor/User:
    • Gross Long: 81,544 contracts (21.3% of open interest)
    • Gross Short: 228,280 contracts (59.7% of open interest)
    • Net Position: -146,736 contracts
    • Historical Context: Commercial net short exposure expanded dramatically over the summer as crop hedging ramped up, widening from roughly -10,000 contracts in early 2026 to a peak net short of -178,611 contracts on September 4, 2026. The current net short of -146,736 represents a modest pullback from extreme short hedging levels, but remains heavily defensive.
  • Swap Dealers:
    • Gross Long: 68,316 contracts (17.9% of open interest)
    • Gross Short: 25,085 contracts (6.6% of open interest)
    • Spreading: 18,714 contracts (4.9% of open interest)
    • Net Position: +43,231 contracts
  • Other Reportables:
    • Gross Long: 53,969 contracts (14.1% of open interest)
    • Gross Short: 14,729 contracts (3.9% of open interest)
    • Spreading: 25,789 contracts (6.7% of open interest)
    • Net Position: +39,240 contracts
  • Nonreportable (Small Traders):
    • Gross Long: 16,132 contracts (4.2% of open interest)
    • Gross Short: 8,985 contracts (2.4% of open interest)
    • Net Position: +7,147 contracts

Flows and Week-over-Week Changes

The aggregate market contracted by 7,264 contracts during the reporting period. Flow dynamics across key participant categories:

  • Managed Money:
    • Gross Long Change: -9,979 contracts
    • Gross Short Change: +740 contracts
    • Spreading Change: -3,431 contracts
    • Net Flow: -10,719 contracts (declining from +67,837 to +57,118 net long).
  • Producer/Merchant:
    • Gross Long Change: +2,729 contracts
    • Gross Short Change: +1,351 contracts
    • Net Flow: +1,378 contracts (net short narrowed slightly from -148,114 to -146,736).
  • Swap Dealers:
    • Gross Long Change: +717 contracts
    • Gross Short Change: +1,159 contracts
    • Spreading Change: +192 contracts
    • Net Flow: -442 contracts.
  • Other Reportables:
    • Gross Long Change: +5,683 contracts
    • Gross Short Change: -4,781 contracts
    • Spreading Change: -2,561 contracts
    • Net Flow: +10,464 contracts (effectively absorbing the bulk of Managed Money liquidation).
  • Nonreportable:
    • Gross Long Change: -614 contracts
    • Gross Short Change: +67 contracts
    • Net Flow: -681 contracts.

Commercials vs Speculators

The balance between commercials and speculators highlights an ongoing structural handoff:

  • Commercial Hedging Dominance: Producers and merchants command nearly 60% of all gross short open interest (59.7%), holding 228,280 short contracts against 81,544 long contracts. Their net short stance (-146,736 contracts) reflects heavy seasonal producer selling and forward price locking.
  • Speculative Retreat: Managed Money has transitioned from aggressive accumulation to steady distribution over the past month. Gross long positions fell from 115,804 contracts on September 4 to 74,374 on October 9—a reduction of 41,430 long contracts (-35.8%) in five weeks. Gross shorts remain subdued at 17,256 contracts (down significantly from the ~123,000 contracts seen in February 2026), indicating funds are taking profits rather than instituting fresh directional short campaigns.
  • Other Reportables Stepping In: Interestingly, "Other Reportables" absorbed a sizable chunk of the selling this week, adding 5,683 long contracts while covering 4,781 shorts, pushing their net position up by 10,464 contracts to +39,240.

Open Interest and Participation

  • Total Open Interest: 382,230 contracts, down 7,264 contracts (-1.87%) from the prior week's 389,494 contracts. Peak open interest in recent weeks occurred on October 2, 2026.
  • Trader Concentration:
    • The 4 largest traders control 9.5% of the net long and 23.8% of the net short position (12.0% gross long, 29.9% gross short).
    • The 8 largest traders control 15.3% of the net long and 31.5% of the net short position (20.2% gross long, 42.7% gross short).
    • High concentration on the short side reflects concentrated merchant/producer hedging desks.
  • Trader Counts:
    • A total of 343 reportable traders were active across all contract months (down slightly from 357 in the previous week).
    • Long Managed Money participants declined by 4 traders (from 86 to 82), while short Managed Money participants fell by 2 (from 35 to 33). Spreading Managed Money accounts decreased from 67 to 61 traders.

Price Context

  • Daily settlement price quotes for the front contract were omitted in the provided reporting series.
  • Consequently, direct price verification and price-positioning divergence metrics cannot be computed for this reporting cycle. Historical positioning flows nonetheless confirm a sharp unwind of peak-bullish fund length since early September 2026.

Risks and Watchpoints

  • Managed Money Liquidation Momentum: Managed Money longs have shed over 41,000 contracts in five weeks. If fund liquidation accelerates below 70,000 gross longs without an offsetting decline in commercial short hedging, the contract faces persistent downside flow pressure.
  • Commercial Hedge Overhang: With commercial gross short interest standing at 228,280 contracts (accounting for 59.7% of market open interest), any macro or export disruption that triggers physical delivery demand could squeeze short hedgers; conversely, lack of end-user demand leaves a heavy supply overhang.
  • Contract Month Transition: In the "Old" contract months, open interest stands at 347,485 contracts, while "Other" (deferred) months account for 34,745 contracts, indicating that current flows remain predominantly concentrated in active front/intermediate expiries.