Alaron Soft Commodity Comment

CHICAGO - Sep 18/06 - SNS -- Following is the cocoa, sugar, orange juice and cotton futures comment from Alaron Trading Corp.

COCOA: (Trading Hours: 7:00am-10:50am CST) (Report, as of 9/18 close)

The market pushed to new contract lows today of 1415 basis December. The market gapped lower on the open and stops were hit below the previous low of 1458. Funds and specs were sellers. This was follow-through selling from Friday's session, when origin selling kept a lid around resistance of 1500. The Ivory Coast has begun to harvest their crop and the marketing channels will officially open on October 1st. This movement of supply to ports will keep the upside limited as origin selling will increase. Traders will keep an eye on the Ivory Coast to see if there is any tension that may cause a disruption to the movmement of beans. There could be tension developing in the Ivory Coast as an election by the October 31st deadline may be delayed. If this happens, there could be some political uncertainty that may cause civil unrest. This could disrupt the movemment of cocoa beans into the marketing channels. Support for December is 1400-1415. Resistance is at 1455-1460.

COFFEE: (Trading Hours: 8:15am-11:30am CST) (Report, as of 9/18 close)

The market closed slightly lower as prices pushed to a new monthly low of 101.00 basis December. The market was pressured on the open due to weakness in the London market. The weather conditions are expected to be ideal in Brazil as the crop is in its flowering period. Rain is needed during this time and there was light, scattered rain this past weekend with more rain expected this week. This will continue to pressure the market. In addition, the Commitment of Trader's Report showed that funds have shifted to a net-short position. This could bring more weakness to the market with a possible test of support at 100.00. Last month, the Brazilian government raised their estimate for their crop to over 41 million bags versus their previous estimate of 40.6 million. The USDA has estimated this crop at 44.8 million bags. Stocks in certified warehouses as of 9/15, were at 3,566,374 bags with 98,075 bags waiting to be graded. Support for December comes in at 101.00. Resistance is at 103.00.

SUGAR: (Trading Hours: 8:00am-11:00am CST) (Report, as of 9/18 close)

The market closed slightly lower today after prices held resistance at the monthly high of 12.50 basis October. Producer selling has been present near this level. Rollovers have been active as the October contract expires on September 30th. In the last week, prices have bounced over 100 points. Despite this bounce off of the contract low of 11.26, this market is still in a downtrend. The market has been pressured in the last few months due to the lack of activity in the cash market and talk that world ending stocks could increase. The cash market has not seen any signiificant purchases during this short-covering. Earlier this month, the Brazilian Ag Ministry group, Conab, estimated the 2006-2007 Brazilian crop at 423.4 million tonnes versus 391.2 last year. This would be a record crop and will keep a lid on this market unless the demand picture turnsaround. Support for October is at 12.00. Resistance is at 12.50.

OJ: (Trading Hours: 9:00am-12:30pm CST) (Report, as of 9/18 close)

For the 7th straight session, prices have closed in negative territory. During this span, prices have fallen over 1000 points. Funds and specs have been liquidating long positions. There have been no significant storms affecting the Florida citrus-growing regions during this hurricane season. There is still a little over a month left during this period. To keep track of any potential storms, log on to www.wxrisk.com. Next year's Florida crop is not expected to be much higher than this year's. Last month, Dreyfus estimated the crop at 160 million boxes, while the Steger estimate came in at 123 million boxes. Traders are questioning the validity of the Steger estimate. Regardless, we are still dealing with a small Florida crop and this as well, will also provide underlying support. The USDA's first estimate on the new crop will not be released until October. This month, the USDA has estimated this current crop to be at 147.9 million boxes. Support for November is at 169.00. Resistance is at 173.00.

COTTON: (Trading Hours: 9:30am-1:15pm CST) (Report, as of 9/1 close)

The market was pressured today on speculative selling as prices closed below support, which had been holding the last 2 weeks, of 54.00 basis December. The market has been under pressure due to weak demand news. Yesterday, the USDA released its weekly export sales report. It showed sales at 64,000 bales. This was on the low end of expectations. At this time of the year, exports are well below the average. The market had been supported on expectations of a smaller crop due to hot and dry weather in West Texas. However, if demand remains weak, a smaller U.S. crop will not have a major impact on prices. Traders will be looking ahead to the USDA's Crop Production/Supply and Demand Report, which will be released on September 12th. Last month, the USDA estimated the crop at 20.4 million bales. Traders had expected the USDA estimate to be between 18-20 million bales. World ending stocks was also increased by the USDA to 48.3 million bales. Traders will see if the USDA finally lowers its estimate on this month's report. The Texas crop is in bad shape as the USDA reported the crop as 55% as poor to very poor, 24% fair, and 21% as excellent. Support for December is at 53.80. Resistance is at 55.00.

Boyd Cruel

Alaron Research Team

800.216.1491

bcruel@alaron.com

www.alaron.com

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