Happy days returned for some investors, as Wall Street's S&P 500 share index touched 1,500 for the first time in more than five years.

And this despite the poorly-received Apple results which sent its shares down 12.0% in late trading.

The spur to a higher day on Western share markets, with London stocks close up 1.1%, and Paris shares up 0.7%, was in part upbeat Chinese manufacturing data overnight, the strongest for two years, but also well-received US unemployment data.

The number of Americans claiming unemployment insurance for the first time dropped by 5,000 in the week to January 19 to a seasonally-adjusted 330,000 – the lowest figure since January 2008.

Cotton stiches up bears

Some of this fed through into agricultural commodities.

Cotton, an industrial raw material at times moves in far closer correlation with shares than food crops, extended its winning run to seven sessions by adding 3.0% to end at a six-month closing high of 82.89 cents a pound in New York, for March delivery.

The rise was helped again by technical factors, with the lot painting over a gap in the continuous chart dating back to June last year.

Rabobank followed Standard Chartered in offering soothing words on cotton futures but failing to offer the reassurance of an upgrade to price expectations.

Rabo, a big agricultural lender, highlighted the prospect of a steep drop in world cotton sowings this year, while Chinese imports remain relatively high, although the December lot it preferred actually underperformed, easing 0.1% to 79.73 cents a pound.

Battle for acres? 

The extent of cotton's gains, now 9% during its winning run, was even noted on the grain markets, where Kansas-based broker Country Futures flagged the "significant rally", attributing it in part to the opening salvos of the battle to win area in farmers' spring planting programmes.

"The talk of large US soybean acres has pushed new crop cotton upward," Country Futures Darrell Holaday said.

"This the first move in the market to begin to compete for US acres this spring."

But then there was little enough among grain and oilseeds to garner bullish attention until late deals when Chicago's big three crops – corn, soybeans and wheat – pared losses.

'Bit of a bounce'

Corn actually managed to close in positive territory, adding 0.5% to $7.24 ¼ a bushel in Chicago for March delivery, an outcome which had looked unlikely for most of the day, and meant regaining its 10- and 50-day moving averages.

One factor in its favour was ideas of a rise in placements of cattle on feedlot last month, despite negative margins among feeders, and questioning again the degree of feed rationing going on.

(The US Department of Agriculture's monthly Cattle on Feed report will be released after the close of markets on Friday.)

However, there was some relief over US ethanol production data too, which showed some recovery, rising 8,00 barrels a day to 792,000 barrels a day, implying more of the grain being used in making biofuels.

"It's a bit of a bounce, and probably explains why corn bounced back a little bit," Don Roose, president of broker US Commodities, told Agrimoney.com.

Ethanol downgrades?

While hardly a mammoth recovery, remaining still among the lowest levels on records going back to 2010, it countered some of the negative talk around about rationing of ethanol production by current corn values.

Richard Feltes, at RJ O'Brien, said he was "picking up market chatter that some analysts are considering dropping their 2012-13 US ethanol use for corn number to 150m-250m bushels below the USDA's 4.5bn-bushel forecast".

There has been market talk of approaching 20% of US ethanol capacity out of production, with Abengoa Bioenergy, for instance, last week saying it would temporarily halt ethanol output at two plants in Nebraska.

Furthermore, Thursday's data showed inventories declining by 278,000 barrels, to 20.1m barrels, a bigger drop than the market had expected.

'The fundamental tie-breaker'

Soybeans fared relatively well too in limiting their losses to 0.1%, to $14.35 ¼ a bushel for Chicago's March contract, when ideas of rain for dry areas of Argentina and southern Brazil appeared to have given bears the upper hand.

"The fundamental tie-breaker," as the contract headed to a low of $14.15 a bushel earlier on, "was the change to a wetter forecast in southern Brazil and Argentina," US Commodities said.

"A front moved through these regions overnight – 0.25-0.5 inches of rain occurred over about 50% of the area," the broker said, adding that "southern Brazil has a wetter forecast in the 11-15 day maps".

At Allendale, Paul Georgy said that Argentine forecasts "now have 50% of the growing area getting rain with a few short spells of heat flare-up.

"Traders struggle to find new bullish news to drive markets higher."

And especially when reports from the early harvest in Brazil are showing better progress, and OK yields.

'Trade is nervous'

Still, one factor in soybeans' favour is the Brazilian logistical hiccups, which may yet hamper efforts by buyers to get hold of long-awaited supplies of the oilseed from South America, and find an alternative to high-priced US supplies.

Agroconsult, after all, has warned of vessels waiting 45 days from next month to load up.

Rory Deverell, at broker FCStone said: "The trade is nervous of Brazilian capacity to logistically move enough soybeans to save the US balance sheet."

That said, "if they do then we should prepare ourselves for a tsunami of cancellations of US soybean loadings and pressure on Chicago futures".

'Crush margins are positive'

In fact, there was the opposite on Thursday, with Chinese buyers showed they were not taking any changes, and buying 510,000 tonnes of US soybeans, albeit for 2013-14 delivery.

The USDA announced a further 113,000 in export sales on top, to "unknown destinations", also of new crop.

"Crush margins are positive in China all the way through the end of the year and importers are looking for opportunity to lock those margins in place," Country Futures' Darrell Holaday said.

Rain on the Plains

Wheat also managed to pare its losses, but still ended down 0.6% at $7.68 ½ a bushel in Chicago, for March delivery, amid ideas of some moisture for drought-pressed winter wheat crops.

"The US hard red winter wheat area will see some moisture this weekend," Mr Holaday said, if adding that there would not be a large amount of rain, and that a "system next week now does not look very promising".

Still, hard red winter wheat itself for March dropped 1.1% to $8.12 ½ a bushel in Kansas.

Paris wheat did worse still, dropping 1.9% to E246.75 a tonne, after European export data showed licences for shipping a modest 364,000 tonnes of the grain this week.

'Another leg down'

Back among soft commodities, New York arabica coffee for March did even worse than Paris wheat, dropping 2.6% to 146.55 cents a pound, pretty near its day low.

"New York coffee has done today what it looked like it was threatening to do yesterday and had another leg down," Sucden Financial said.

"Trading was not quite as dramatic as earlier on in the week. But the 149.40-cents-a pound level served as relatively weak support, and once the US markets opened in the afternoon this was taken out."

Latest reports from Brazil, the top arabica producing country, show benign weather not only boosting production potential of some crops, but enabling it to come from only one flowering, making it easier to harvest, and boosting consistency of bean quality.