The S&P500 fluffed it.

The drums rolled, the fanfare played, the fat lady stood ready to sing, in expectation of the US share index gaining the two points it needed to set a record high – only for it to get stage fright, after weak US consumer confidence poured doubt on the country's economic revival.

The index stood 0.3% down in late deals.

If there was an equivalent in agricultural markets, it was perhaps the National Oilseed Processors Association data on the February US soybean crush, which was also expected to show some fireworks, but proved a damp squib too.

'A little disappointing'

OK, with February being a short month, the figure was not going to live up to January's 158.2m bushels.

But a fall below 140m bushels was not expected, and especially not a drop below the February figure of 136.4m bushels, which Friday's figure undershot by 28m bushels.

"It was a little disappointing," Darrell Holaday at Country Futures said.

Indeed, it ensured Chicago soybeans, having trod positive territory early on, ended 0.7% lower at $14.26 a bushel, the fourth successive negative close, and taking losses for the week above 3%.

'Huge back-up of barges'

Indeed, it added to pressure from ideas that China is managing to meet its soybean needs elsewhere, for old crop at least, despite the Brazilian port hold-ups.

While the US Department of Agriculture did announce sales of 165,000 tonnes of US soybeans to China, that was for 2013-14.

"The talk of China slowing down their purchases of soybeans and the cancellation of the port strike in Brazil yesterday has helped push prices lower," Steve Georgy at broker Allendale said.

"Brazil still has a huge back-up of barges at their main ports. This doesn't mean that the problem will be fixed, it just means it is not getting worse, for now."

Frost threat

Signally, the decline also took the contract below its 50-day, 75-day, and 100-day moving averages, which may encourage fund selling, and bode ill for performance next week too.

But forthcoming performance could depend on weather in Argentina too, with the potential for frost damage creeping up the agenda

"The possible frost in Argentina over the weekend has some concerned," one US broker said, adding that "the situation bears close monitoring".

Fears of drought are "becoming less critical as temperatures cool with some areas in Buenos Aires province approaching freezing last night", Richard Feltes at RJ O'Brien said. 

"Soybeans in central and southern Argentina still need 15-20 days of frost-free growing weather."

'Only offer partial relief'

Frost poses less of a risk to Argentine corn. (The grain can, and has been, harvested in the US, for example, after winter.)

Whatever, investors remained more alert to the prospect of the USDA's quarterly grains report at the end of the month, and whether this will support ideas of substantial US corn feeding - and how much corn, indeed, has been substituted for wheat.

"Extra wheat feeding will only offer partial relief to acutely-tight US summer corn supply," Mr Feltes said, contrasting the "collapse" in soybean spreads, between May and November contracts, this week with and the more robust premium of old crop lots corn versus the new crop December contract.

'Returned corn seed'

That said, on Friday Chicago's December lot, in closing up 0.4% at $5.61 ¾ a bushel, gained ground on the May contract, which edged 0.1% higher to $7.17 a bushel, amid ideas of it losing out to soybeans in growers' planting plans.

US Commodities reported continued talk in the South East US, an early sowing region, "returned corn seed and replaced with soybean seed".

Soybeans for November closed up a more modest 0.1% at $12.61 a bushel, allowing the much-watched soybean:corn ratio to tighten a notch to 2.24.

There are also ideas of farmer selling lying not too far ahead, with Benson Quinn Commodities noting that "the next tranche of sales will likely take place if futures can achieve the $7.20-7.22-a-bushel level.

"The significance of this level is that the 100- and 200-day moving averages currently sit at $7.21 ½ and $7.22 ¾ a bushel respectively."

Wheat substitution

Wheat, meanwhile, lost its place on the podium gained with talk of its substitution in place of corn in livestock rations, given its relative cheapness.

The speculation was still alive.

"There is more and more talk about the amount of wheat being shipped out of the soft red winter wheat Lakes region to the south west cattle feeding areas," Country Futures' Darrell Holaday said.

"That will tighten soft red winter wheat stocks and may weaken corn basis levels in some areas."

EU, Russia harvest estimates

Abroad, Coceral came in with a lowball estimate for the European Union wheat crop, the world's biggest, seeing only a small increase in the harvest in the bloc's top-ranked producer, France.

However, ideas of tight wheat supplies received a little bit of a knock with an upgrade by Sovecon to 84m-89m tonnes, from 80m-87m tonnes, in its forecast for the Russian grains harvest, saying winter crops had turned out better than expected.

That countered Thursday's talk of post-harvest Russian grain buying, to replenish state stocks, limiting exports from a fiercely competitive wheat supplier.

Also, Iran was reported as importing more wheat from Germany, in deals that could reach 1.5m tonnes over 2012-13, and curbing hopes of purchases of US supplies.

Chicago wheat for May closed down 0.2% at $7.23 a bushel.

In Europe, a revival in sterling pressed on London wheat for May, which edged 0.3% lower to £197.90 a tonne, but Paris wheat for May added 0.1% to E234.75 a tonne, gaining support from Coceral caution.

'Suspending the rules of the market'

Among soft commodities, New York cotton maintained its winning run, adding 1.8% to close at 92.50 cents a pound for May delivery, the contract's highest finish for a year.

The contract earlier touched 93.93 cents a pound, its highest since February last year.

Commerzbank pointed to US export sales data on Thursday showing "unabated strong demand for US cotton despite the already-high prices.

"Once again, one of the most important buyers was China. And China's buying interest is likely to continue," the bank said, noting reports that the country will release a further 800,000 tonnes in import quotas next month.

"This also appears necessary given that the Chinese state bought up almost the entire last year's domestic harvest, which has led to a tightening of local supply and rising domestic prices."

While world stocks are at record levels, "the Chinese purchases are currently suspending the rules of the market", by leaving stacks of it in the country's state stores.

Two-year low

However, New York arabica coffee returned to its losing streak, closing down 1.5% at 137.50 cents a pound for May delivery, the weakest finish since June 2010.

"Speculation as to the volume of the Brazilian harvest, of which the harvest will begin in April, and about a possible recovery of supplies of coffee from Colombia have offset the negative production impact of the spread of rust on coffee plantations in Central America,"  Silas Brasileiro, executive president of Brazil's coffee council, said.

Also worrying investors is the level of Brazilian beans left unsold from the last harvest.

Safras estimated that 71% of the crop was sold, compared with rate of 87% a year before, a delay down to low prices, but yet in turn a negative pressure on values in implying a bigger volume of disposals to come.