Alaron Softs Comment

CHICAGO - Jan 17/08 - SNS -- Following is the orange juice, cotton and coffee comment from Alaron Trading Corp.

In the after hours session, sugar prices hit a 16-month high as the March futures traded above 13.00. The rally we have seen this week was due to a Brazilian hedger being forced to cover short positions by the ICE exchange. When traders caught wind of this, they decided to start buying this market, which could make this rally that we have seen this week a bit overdone. The longer-term fundamentals are favorable as India's crop is expected to come in smaller and on talk of using more sugar this year towards ethanol. However, the near-term fundamentals are bearish due to the large supplies and the weak demand. If you are long this market, be careful and make sure you have your stops in as this market could turnaround quickly. The March future will be expiring at the end of February so we will begin to see spread trading be active in the next few week. In addition, with the ample supply of sugar in the world market, we could see prices pressured as we get closer to expiration. Support for March is at 12.50. Resistance is at 13.00-13.10.

Boyd Cruel

Alaron Research Team

800.563.9510

bcruel@alaron.com

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