Overview
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KC Arabica Coffee
Strategic
Arabica coffee continues to chop within the 300–350 area, offering little clue as to how the market will resolve this high consolidation. If anything, the continued chop lowers conviction for the bear case, as the market should ideally have followed through to the downside by now. The bearish base case becomes slightly less probable, but we simply have to wait until the market shows its hand.
Tactical
While the longer term scenario is less clear, both options point lower in the short term. The blue primary count would deliver a sharp drop in wave iii, whereas the alternate bullish count sees us chopping lower towards 280 in wave (ii). The structure of the next decline should really help clear up where we stand on the longer timeframes.
CT Cotton
Strategic
As discussed last week, CT is long-term bullish, with the expectation that the chart breaks above the May 2026 high of 88.88. As forecast last week, we saw some backing and filling over the week, but nothing has changed the bullish outlook for cotton. A break below 75.50 means something else is playing out.
Tactical
Recent price action is consistent with last week's expectation that the pivot would chop CT around for another pullback. If the chart is to remain near-term bullish, we should really see the wave iii move up to 92 start in earnest this week. Too much more chopping around here reduces the probability of immediate bullishness and means we may have something else to deal with. We remain bullish while price is above 75.50.
