Alaron Softs Comment

CHICAGO - Aug 12/08 - SNS -- Following is the orange juice, cotton and coffee comment from Alaron Trading Corp.

The USDA released its Monthly Crop Production/Supply and Demand Report this morning. It was viewed as a "friendly" report as the December contract touched limit (300 points) shortly after the report was released. The report showed that U.S. production for the 2008-2009 marketing year is estimated at 13.77 million bales versus 14 million last month. Exports for the same marketing year was estimated at 15 million bales versus 14.5 million last month. The result of the lower production and slightly higher demand resulted in an estimate for lower ending stocks of 4.6 million bales versus 5.3 million last month. This ending stock number is a significant drop from the ending stocks  for the 2007-2008 marketing year of 10.2 million bales. The key for this market to move higher in the long run is for demand to increase. This market has been waiting for strong demand from China for the last few years. We have yet to see it. If for some reason, we see increased China demand in the next year, we could see ending stocks decline through the next year.

As I mentioned earlier, the December contract touched its daily limit of 300 points shortly after this report was released. However, the market backed off and was slightly pressred by the weakness in the commodity markets, mainly the weakness in the Chicago grains. Traders are going to continue to watch the development of the current crop. Yesterday's USDA Crop Progress Report showed as of 8/10, that 45% of the crop was rated good to excellent versus 47% the previous week, 33% fair versus 32% the previous week, and 22% poor to very poor versus 21% the previous week. We could see an improvement in next week's report as rain is expected in the cotton growing regions this week. Support for December is at 68.00-68.50. Resistance is at 71.50-71.70.

Boyd Cruel

Alaron Research Team

800.563.9510

bcruel@alaron.com

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