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