Alaron Soft Commodity Comment

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

This morning, the USDA released it's monthly Crop Production/Supply and Demand Report. The USDA lowered their estimate on the Florida crop to 132 million boxes versus 140 million last month. This 8 million box reduction was factored into the market as prices have rallied in the last 3 weeks. A new contract high was made this month of 205.80. This was the reduction that I've stated in previous reports. There should be more reductions from the USDA in the coming months as the mid and late crops are harvested.In the end, we could see this Florida crop come in between 125 and 130 million. With this being said, the longer-term trend is still higher based on the fundamentals in this market. The cash market still has a significant premium over the futures market as supplies are tight. Also, we still have the hurricane season to get through this year. This period runs from June through October.

Going back to this morning's report, the market factored in this reduction of 8 million boxes, which is why we saw prices move lower today. The May futures closed 430 points lower at 199.90. This market was technically overbought as prices rallied almost 1800 points in the last 3 weeks. This neutral report was a good reason for prices to finally retrace some of the gains. The market should find underlying support based on the fundamentals I stated above. The next USDA report will be released on April 10th. We could see prices trade sideways in the short-term and possibly on both sides of 200.00 until we get closer to the next report. Support for May is at 197.50. Resistance is at 201.00.

Cotton prices opened slightly lower this morning due to a neutral to slightly bearish report by the USDA. The USDA lowered exports from 14.5 to 14.0 million bales. This in turn, increased ending stocks from 8.3 to 8.8 million bales. Prices traded in a narrow range of 65 points. Despite this slightly bearish report, prices were able to hold support of 54.00 basis May. Traders had been anticipating a decline in exports due to the weak demand from China this quarter. The focus will now temporarily shift to the USDA's Prospective Plantings Report, which will be released on March 30th. We should see prices move higher ahead of this report as a lower planting acreage is expected. Technically, we will need to see prices stay above 54.00 in order to move higher. Prices rebounded after the weak opening and May closed up 1 point at 54.50. Support for May is at 53.90-54.00. Resistance is at 54.90.

Boyd Cruel

Alaron Research Team

800.216.1491

bcruel@alaron.com

www.alaron.com

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