Risk assets such as commodities and equities were given an initial lift Friday after economic data from China proved broadly better-than-expected, raising hopes of a pick-up in economic activity and in turn raw material demand.

But, while commodities remains broadly upbeat across the day and the S&P500 share index hit a five-year high of 1,481.87 points, equity sentiment soured shortly after the US opening as data showed consumer sentiment unexpectedly dropped to a one-year low.

The University of Michigan consumer sentiment reading of 71.3 was well below the 75.1 forecast and triggered profit taking across the majority of risk classes.

The Dow Jones Industrial Average finished down 0.1%; in Europe the FTSE 100 managed a 0.3% gain while the German Dax index closed in the red, down 0.4%

The dollar Index finished up 0.4%. Brent crude futures finished up almost 0.1% with energy prices supported by firm natural gas prices as cold weather hit the US and Northern Europe.

Odds 'stacked heavily' against winter wheat

But, while stock prices softened grain prices remained broadly under pinned amid ongoing signs of worsening condition of the US winter crop, which threatens to further squeeze global supplies.

Chicago wheat for March delivery finished the week at $7.91 ¼ per bushel, up 1.1%, posting its biggest weekly gain since July.

"The odds are stacked heavily against a favourable hard red winter wheat harvest", said meteorologist Gail Martell of the Martell Crop Projections team.

Dry weather is expected to persist in the US winter wheat region for at least the next week, although grower were offered some relief as recent cold snap is not expected to harm crops.

'Not enough to replenish parched soils'

But despite recent rains which have "produced generous precipitation in Southern Plains winter wheat areas," experts continued to caution as to the extent of drought conditions in the region.

"One or two winter storms are not enough to replenish parched soils," cautioned Martell. "Fields are dry through a very deep layer" she warned.

A report issued last week by a consortium of federal and state climatology experts, only added to draught fears after warning crop-growing and cattle-grazing regions could face another hot, dry year.

Light volumes in pre-holiday trade

in spite of the weather threats and mixed economic data, trading volumes were relatively light Friday, as players massaged positions ahead of Mondays holiday, which will see US market closed for the Martin Luther King holiday.

The front and most active corn contract in Chicago (March), saw around 96,500 lots change hands over the day, down almost 50% compared with volumes at the start of the week.

Chicago corn for March delivery closed Friday with a 0.4% gain to $7.27 ½ a bushel.

Ethanol plants close

But despite the gains the market remained overshadowed by the absence of South American weather scares as well as concern of declining ethanol usage.

"Poor margins are causing the closing of the ethanol plants in York and Ravenna NE," Paul Georgy of Allendale said.

"We are hearing there are more plants across the Corn Belt considering the same option as the losses mount."

Technical considerations

Chartists also highlighted a negative technical picture as keeping corn prices capped.

"Futures [for March] worked back towards the $7.30 level.. but did not get there", said David Fiala, president of FuturesOne.

"The March chart technical's have good resistance at $7.35, then $7.39 a bushel," he added.

Bucking the trend

Soybeans bucked the trend though amid signs of oversupply.

Authorities in Argentina granted a further 3m tonnes of export licenses, brings total granted to near 18m tonnes.

Losses were tempered somewhat as private analytics firm Informa Economics cut its US 2013 soybean acreage estimate to 78.77m from 78.96m.

March soybean settled down some 0.3% at $14.26 per bushel as profit taking emerged. However futures were still on course for their biggest weekly gain since August as strong demand underpinned the market.

Live cattle futures lost further ground after trading lower yesterday as Cargill announced it will close the Plainview, TX beef processing plant on Feb 1 due to tight cattle supplies.

Coffee defy weaker softs

New York arabica coffee futures built on its recent gains to reach its highest since late October as reports of coffee leaf rust in Central America triggered speculative short covering.

March arabica futures on the ICE platform stood at 156.30 cents per pound by the close with a 0.5% gain.

Robusta futures on LIFFE were down $3 at $1,976 a tonne.

Cocoa futures for March delivery reached a one month best of $2313 tonne before turning lower on trade selling, ending the day at $2285 per tonne, down 0.5%.

The ample supply picture continued to keep sugar prices on a back footing. ICE March sugar futures were down 0.5% by the close, settling at 18.37 cents a pound.