Alaron Soft Commodity Comment

CHICAGO - Mar 2/07 - SNS -- Following is the cocoa, sugar, orange juice and cotton futures comment from Alaron Trading Corp.

May cocoa futures continue to flirt with its contract high of 1812. The market showed some weakness after light selling above 1800 kept a lid on the market. Support held at 1770 on speculative buying and prices got back above 1800. It was the second straight day prices have closed above 1800. This mild pullback we saw today could give the market the momentum it needs to take out the contract high early next week. However, it will be important to see follow-through buying and prices to close above 1800 or we could see some long liquidation. The market continues to be supported on expectations of a smaller Ivory Coast crop. The crop could come in around 950,000 tonnes. As the main crop harvest is almost complete, we will begin to see less origin selling. Support for May is at 1770. Resistance is at 1810-1812.

May coffee futures were under pressure all week as it gave back most of its gains from last week's short-covering rally. The market has been under pressure due to the lack of news and ample supplies in the short-term. The longer-term fundamentals are still supportive for this market as Brazil is expecting a significantly smaller crop. However, the market should continue to move lower for the next few weeks. As of 3/2, stocks in certified warehouses were at 3,758,900 bags with 201,723 bags waiting to be graded. Support for May is at 114.00-114.25. Resistance is at 117.00.

May sugar prices pushed to a near 8-week high today on fund short-covering. However, prices held support at this level of 11.50. This was follow-through buying from yesterday's session. Some of the short-covering occured yesterday as the March contract headed into expiration. Until, we see funds reverse their net-short position, this market should continue to move lower. The cash market remains weak and there is ample supply of sugar in the world market. Brazil will begin to harvest their crop in the next few weeks and this will just add more supply into the market. So basically, the fundamentals remain weak in this market. Support for May is at 11.10. Resistnace is at 11.50.

OJ prices closed slightly higher but stayed inside the previous session's range today. The market pushed to a new contract high yesterday of 205.80 basis May. The market has been on an uptrend since posting a low of 181.50 on 1/31/07. Recently, prices have shown more strength as there are expectations that the USDA could be lowering their next Florida crop estimate. The report is scheduled to be released on March 9th at 7:30AM Central Time. Last month's estimate was left unchanged at 140 million boxes. Now that the main crop has been harvested, we could see the USDA reduce it down 7-10 million boxes. After the whole harvest is complete, don't be surprised to see the final crop come in around 120-125 million boxes. Supplies are very tight right now as the cash market continues to have a 25-30 cent premium over the futures market. The market is overbought in the near-term. The market could move sideways to higher prior to next week's report. Support for May is at 204.00. Resistance is at 205.80-206.00.

The market closed higher to end the week after bouncing off the weekly low of 52.70 basis May. The market was under pressure earlier in the week due to weakness in the Asian stock market. However, prices moved higher but resistance has been able to hold around 54.00-54.25. Demand has not been as good as anticpated during this 1st quarter. We will be getting an update on this in next week's USDA Crop Production Report, which is scheduled to be released on March 9th at 7:30AM Central Time. In last month's report, the USDA lowered exports by from 15.7 million bales to 14.5 million bales. This in turn, raised ending stocks from 7.1 million to 8.3 million bales. Expectations are for another possible reduction in exports. After this report, traders will be looking ahead to the USDA's Prospective Plantings Report. This number could be supportive to the market as we will more than likely see a reduction in planting acres as it shifts to the corn market. Support for May is at 52.70. Resistance is at 54.00-54.25.

Boyd Cruel

Alaron Research Team

800.216.1491

bcruel@alaron.com

www.alaron.com

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