Alaron Softs Comment

CHICAGO - Dec 10/07 - SNS -- Following is the orange juice, cotton and coffee comment from Alaron Trading Corp.

March cocoa pushed to a 4-1/2 month high today of 2114. Prices rallied today due to a strike in the Ivory Coast which has halted the movement of cocoa beans through the marketing channels. This is the second week in a row that there has been a strike. Last week's strike lasted for 2 days. It is unsure how long this strike will last. Cocoa export laborers are the group on strike. This is the group that is responsible for the loading and unloading of beans at exporting companies. Despite last week's strike, arrivals continue to be well ahead of last year's pace. This market is overbought as funds and specs have increased their net-long position in the last week. However, as long as the strike continues, this market will find underlying support. Support for March is at 2080-2085. Resistance is at 2120-2130.

Tomorrow morning, the USDA will be releasing its Monthly Crop Production Report. It will be released at 7:30am CST. There are no surprises expected for the Cotton report. U.S. production is expected to increase to over 19 million bales versus 18.86 million last month. With demand being weak, ending stocks are expected to increase to 7.7 million bales versus 7.6 million last month. The market found support between 62.90-63.00 last week. When prices held, shorts began to cover positions. Longer-term, we should see prices move higher. However, if demand does not pick up, the upside could be limited. Support for March is at 64.00. Resistance is at 65.00-65.25.

The USDA will be releasing its second estimate for the upcoming Florida crop in tomorrow's report. Their first estimate was released in October and came in at 168 million boxes. Private estimates  released in  August came in at 180 million and 197 million boxes. Trade expectations are  unchanged to a 2 to 3 million box increase. This market has rallied since mid-November as a weather premium has been built in ahead of the freeze period in the Florida citrus-growing regions. This preiod runs from late December to mid to late January. Support for January is at 141.50-142.00. Resistance is at 146.00.

Boyd Cruel

Alaron Research Team

800.563.9510

bcruel@alaron.com

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