Alaron Soft Commodity Comment

CHICAGO - Apr 3/07 - SNS -- Following is the cocoa, sugar, orange juice and cotton futures comment from Alaron Trading Corp.

May Cocoa futures gapped 60 points lower Monday morning on fund and spec selling. However, the selling did not stop there as prices dropped another 60 points the remainder of the session. Last Friday after the close, the Commitment of Trader's Report (futures and options) showed as of 3/27, that funds and specs were holding a record net-long position of over 58,000 contracts. This weighed on the market. Prices were already overbought at the beginning of last week and only got worse. The rally we have seen in this market has been mainly technical in nature. The market has found underlying support the past few months as there are expectations for a smaller Ivory Coast crop due to the lack of rain. However, a bull market needs to be fed bullish news, which really wasn't the case for this market. We could see more technical selling in the near-term. There is a downside gap that extends to 1786. May options will be expiring on Thursday as the markets will be closed on 4/6/07, in observance of Good Friday. Support for May is at 1800. Resistance is at 1870.

Coffee prices pushed to new lows yesterday of 108.30 basis May. The market continues to be under pressure as there are ample supplies. As of 4/2, stocks in certified warehouses were at 3,927,081 bags with 124,492 waiting to be graded. The market could find support around the 108.00 level. If this level is taken out, we could see 105.00. However, the downside could be limited as we are nearing fair value levels. The longer-term trend is still up in this market as we are expecting a smaller Brazilian crop. Also, the market will begin to build a weather premium ahead of the winter season. Support for May is at 108.00. Resistance is at 110.00.

Sugar prices pushed to a contract low yesterday of 9.68 basis May. The market continues to be pressured by the abundant supplies and the weak demand. The supply situation will only increase as Brazil harvests their crop. Any rallies may be short-lived. The May contract will be expiring at the end of the month and we could see prices continue to get weaker due to the current fundamental situation. Technically, we could see prices get down around 8.50, which is the 61.8% retracement level from last year's high and the low from December 2003. Spread trading will be active in the next couple of weeks ahead of the May expiration. Support for May is at 9.50. Resistance is at 10.00.

May OJ contines to bounce off last week's low of 185.10. Trade buying has supported this market below 190.00. The sell-off we saw last week was similar to the sell-off we saw at the end of January this year. Funds and specs liquidated long positions and the trade were buyers near these lower levels. This retracement is healthy for this market as the uptrend is still intact. Supplies continue to be tight as the Florida crop was estimated at 132 million boxes in last month's USDA Report. We could see another reduction in next week's report, which is scheduled to be released on 4/10 at 7:30am CST. In the end, we could see this current Florida crop between 125-130 million boxes. Support for May is at 190.00. Resistance is at 193.00.

May Cotton has been moving lower since last Friday's USDA Planting Report. The USDA estimated cotton plantings at 12.147 million acres, which was within trade estimates of 11.75 to 12.86 million. This was a friendly number. This month, the market has basically been in a trading range between 52.70-54.75. Demand in the first quarter has been below expectations. Demand for the 2nd quarter is expected to be better, with hopes that China buying will increase. Support for May is at 52.70. Resistance is at 54.00.

Boyd Cruel

Alaron Research Team

800.216.1491

bcruel@alaron.com

www.alaron.com

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