Alaron Softs Comment

CHICAGO - Oct 14/08 - SNS -- Following is the orange juice, cotton and coffee comment from Alaron Trading Corp.

With the equity markets continuing to show strength and the weakness in the Dollar, the soft commodities were firmer again today. These markets, like all the other commodites, were pressured in recent weeks due to concerns about global demand.

Cocoa: The Ivory Coast harvest has been progressing and beans have been going through the marketing channels in the last month. This added more weakness to this market. However, the market could find some support as farmers have been holding back beans in hopes for higher prices. However, if demand remains weak, this support may be short-lived. Support for December is at 2300. Resistance is at 2385-2400.

Coffee: The upside had been limited in this market as a large Brazilian crop is expected. The outlook for demand has been mixed. Some are looking for deamnd to weaken due to the global economic ocncerns. However, the twist is that demand could actually remain stable or even increase as consumers may look to consume coffee at home versus buying their coffee at Starbucks. Support for December is at 116.50-117.00. Resistance is at 121.00.

Sugar: Before the concerns for global demand arose, sugar demand was expected to exceed production for the next 2 marketing years. However, this view has changed due to the economic concerns. In addition, the outlook for lower oil prices  has limited the upside in this market. Support for March is at  11.20. Resistance is at 12.00.

OJ: This market was pressured more last week after the USDA released its first estimate for the Florida crop. The USDA estimated the 2008-2009 Florida crop at 166 million boxes versus 170 million the previous year. Even though this estimate came in slightly lower than the previous year's crop, it was still viewed as bearish as private estimates, which were released in August, came in between 150-155 million boxes. The Florida crop managed to escape any damage during a fairly active hurricane season this year. The next possible weather threat for this crop would be a winter freeze in Florida. That period runs from mid-December through mid-January. Support for January is 84.00. Resistance is at 86.00.

Cotton: This market has been greatly affected by the weak outlook for global demand. U.S. production has declined in the last 2 years. But I have stated in many of my reports that the key for this market to have a significant rally is demand. For years, traders were anticipating strong demand, mainly from China. However, the global economic concerns has weakened the demand picture significantly. The next major support level for this market is the May 2007 low of 46.10. Support for December is at 50.00. Resistance is at 52.00.

Boyd Cruel

Alaron Research Team

800.563.9510

bcruel@alaron.com

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