Alaron Soft Commodity Comment

CHICAGO - Feb 9/07 - SNS -- Following is the cocoa, sugar, orange juice and cotton futures comment from Alaron Trading Corp.

This morning, the USDA released its Monthly Crop Production Report. This report involved the OJ and Cotton markets. The report was neutral to slightly bearish for both markets. The USDA left its Florida OJ crop estimate unchanged at 140 million boxes. Trade expectations were for an unchanged to slightly lower estimate. The market opened lower based on this report. However, light speculative buying supported the market and the March contract closed in positive territory, up 45 points at 188.90. Even though the estimate was left at 140 million boxes this month, the USDA will more than likely reduce this crop in its March and or April report. The crop is still recovering from the hurricanes in the last few years and in adition, has had to deal with diseases such as citrus greening and citrus canker. Supplies remain tight in this market and as we get closer and into the March delivery period, which is on March 1st, we could see some strength in this contract and the spread widen versus the back months. The cash price continues to have a premium over the futures market and supplies are limited in the cash market, so if anyone needs the fruit, the only way they can get it is through the futures contract. Spread trading will be active in the next couple of weeks. Support for March is at 186.00 and resistance is at 190.00.

In the cotton report, the USDA changed its estimates for exports and ending stocks. Exports were lowered to 14.5 million bales versus 15.7 million the previous month. Ending stocks were increased to 8.3 million versus 7.1 million bales the previous month. In the last week, cotton prices dropped over 300 points ahead of this report. The market factored in these revisions which is why we opened slightly higher this morning. Prices traded in a 50 point range today and managed to close up 35 points at 52.76 basis March. The market will find underlying support as it will be losing planting acreage to the corn and beans. The USDA's Prospective Plantings Report will be released on March 30th. However, we will need to see demand increase if prices are going to re-test the December 2006 high of 57.05. Spread trading will be active ahead of first notice day on February 22nd. Support for March is at 52.50. Resistance is at 53.50.

Boyd Cruel

Alaron Research Team

800.216.1491

bcruel@alaron.com

www.alaron.com

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