Arabica has corrected 38% from its February 2025 all-time high while ICE certified stocks sit at six-month lows — a physical market signal that contradicts the bearish macro narrative. This report defines the activation triggers that separate a monitor posture from a tactical accumulate in a subsequent IU note.
| Scenario | Probability | Key Condition | Price Target |
|---|---|---|---|
| Early Reversal | 25% | ICE stocks fall below 350K bags; Brazil harvest disappoints (<70M); El Niño confirmed; MM net long rebuilds to +40K | $3.20 – $3.60 |
| Base Case — Range / Drift | 50% | Brazil delivers ~72M bags; stocks stabilize 400–500K; curve eases off deep backwardation; positioning grinds sideways | $2.40 – $2.90 |
| Continued Downtrend | 25% | Brazil delivers >74M bags; ICE stocks rebuild above 600K; backwardation breaks to contango; spec longs capitulate | $2.00 – $2.30 |
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