Alaron Softs Comment

CHICAGO - Feb 4/08 - SNS -- Following is the orange juice, cotton and coffee comment from Alaron Trading Corp.

March coffee closed today at 142.70, up 360 points. Fund buying pushed prices above resistance of 140.00 and to the day high of 144.50. This high just fell short of the October 2007 high of 144.60. Longs began to liquidate as there was no follow-through buying at this level. If prices continue to hold this level, we could see more long liquidation in the near-term. The volatility in this market could remain high as March options expire this Friday. There is a large open interest in the 140/calls so we could see prices move below this level by Friday. If longs continue to liquidate the next level would be 135.00 and possibly 130.00, which is the lower end of its trading range. There is little news in this market as traders have already factored in the Brazilian crop estimates, which were released in December. This market has a seasonal tendency to move sideways/lower through April. However, this could change if the funds remain active in this market. The funds have been moving into the softs sector this year as can be seen in the price movmement of cocoa and sugar. As of 2/1/08, stocks in certified warehouses were at 4,364,481 bags with 8.575 bags waiting to be graded. Spread trading will get more active ahead of first notice day for the March contract on 2/21. Support for March is at 140.00. Resistance is at 144.50-144.60.

Boyd Cruel

Alaron Research Team

800.563.9510

bcruel@alaron.com

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