Alaron Soft Commodity Comment

CHICAGO - Feb 6/07 - SNS -- Following is the cocoa, sugar, orange juice and cotton futures comment from Alaron Trading Corp.

Cocoa prices closed slightly higher today after weakness early in the session. Prices opened on the low of 1610 basis March on follow-through selling from the previous session. The market found support and prices moved higher throughout the session. The market has been trading on technicals due to the lack of news. There have been concerns that the dry weather in the Ivory Coast could reduce the crop. Traders will be monitoring the weather for the next few weeks. Spread trading will be active ahead of first notice day for the March contract on March 14th. Support for the March Contract is at 1610. Resistance is at 1660.

Coffee prices were lower today on follow-through selling from last week as prices held resistance at 120.00 basis March. The market could be ready to re-test last month's low of 115.35. There has been very little news in this market. If prices take out last month's low, the next objective on the downside is around 110.00-111.00. Producers have been noted sellers on any rally in the last couple of weeks. The longer-term outlook for this market is still positive as supplies could be tight as the Brazilian coffee-crop is expected to be significantly smaller. Stocks in certified warehouses,as of 2/5, were at 3,734,152 bags with 169,605 bags waiting to be graded. Support for March is at 116.00. Resistance is at 118.50.

The sugar market continued to move lower today as prices traded in a narrow range. The market continues to be weak as there are ample world supplies and very little demand. This market will continue to push lower until we see some major buying in the cash market. Funds have been major sellers and are net-short over 21,000 contracts. The March-May rollover has been active ahead of the March expiration on February 28th. Support for March is at 10.35. Resistance is at 10.70.

OJ prices continue to bounce off of last month's low of 184.20 basis March. Last week, prices dropped almost 2000 points. The market was due for a correction, however, it was a little overdone. Traders are looking ahead to the USDA's Crop Production Report, which will be released this Friday at 7:30am Central Time. Last month, the USDA left the Florida crop unchanged at 140 million boxes. There is talk that this crop could come in smaller. There were no freezing temperatures this year in the Florida-citrus-growing regions. However, there are other issues that could lead to a crop reduction. The question is whether the USDA will lower the crop in one report or do it gradually in reports in the coming months. Cash prices continue to be at a hefty premium over the futures market, despite the recent sell-off in the futures market. We could see some buying going into this next report. If the USDA puts the estimate back at 135 million boxes, we could see some strength in the futures market. Support for March is at 190.00. Resistance is at 192.50.

The cotton market gapped higher this morning as prices continue to bounce after support held at 53.00 basis March. The market has been under pressure as demand in the first quarter has been disappointing. Traders will continue to monitor our demand situation in the USDA's Weekly Export Sales Report. However, the focus has shifted on the acreage planting number which won't be released until March 30th. With the surplus of cotton from the last crop, lack of demand, and acreage moving to corn and beans, we could see cotton plantings be reduced. The National Cotton Council estimated plantings at 13.21 million acres versus 15.3 million last year. But for the most part, in order for prices to really push higher, we will need to see better demand. Support for March is at 54.00. Resistance is at 55.00.

Boyd Cruel

Alaron Research Team

800.216.1491

bcruel@alaron.com

www.alaron.com

DISCLAIMER: The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Information on this page is derived from third parties and is deemed to be reliable. STAT Communications Ltd. accepts no responsibility for errors, omissions or inaccuracies in any of the material presented on this web site. Opinions expressed on this web site are those of the respective individuals and/or institutions and do not represent the opinions of STAT Communications Ltd. or its management.