Agricultural commodity bulls faced an uphill battle on Thursday, with markets generally taking something of a negative tone.

The, small, decline in the US economy identified earlier in the week, coupled with the prospect of a key American jobs report out on Friday, quelled appetites for risk, and sending shares down 0.7% in London and 0.9% in Paris.

Wall Street stocks were 0.2% lower in late deals, while the CRB commodities index lost 0.3%, with copper, for instance, closing down 0.7% in London after touching a three-month high.

'Showers started showing up'

And grains and oilseeds faced the added pressure of rains in Argentina and southern Brazil, where dryness is threatening what had been high hopes for corn and soybean harvests.

"The soybean market came off the early overnight highs when showers started showing up on the Argentine radar, Darrell Holaday at Country Futures said.

"The forecasts had called for the rain, but they were slightly heavier than expected."

Benson Quinn Commodities said that "support from follow-through buying early in the overnight session was offset by reports that better than expected rainfall was taking place in portions of Argentina.

"Initial reports indicate that some areas may have received up to 1 inch of moisture, which would definitely benefit areas that may have experienced a little stress.

"Intermittent rainfall is expected through the balance of today and into tomorrow as the system slowly works its way into southern Brazil."

'Stressed area should contract'

The impact?

"The stressed area should contract to 30%, versus 40% currently," Iowa-based broker US Commodities said.

As an added pressure on prices, US weekly export data for grains were viewed as disappointing, coming in at 252,000 for corn, at the bottom end of the range of forecasts, as were wheat's at some 380,000 tonnes.

But bears did not hold all the cards.

US export data for soybeans were better received, coming in at 1,253,000 tonnes, old crop and new, twice some forecasts.

'Yields below expectations'

Furthermore, there are concerns in some parts of Brazil over too much rain, which is hampering the early harvest and hampering transport to port.

"Some traders are more excited about too much rain in Brazil where bean harvest is being delayed," Paul Georgy at broker Allendale said.

Benson Quinn said that "near term", it found "the possibility of additional US soybean sales due to slow harvest progress in Brazil more supportive than the potential reductions to South American soybean production".

And Country Futures' Darrell Holaday clocked talk "that early yields in Brazil are below expectations", but added that "we would be cautious with those thoughts", with such rumour open to manipulation.

Corn vs soybeans

That helped limit the decline in Chicago's March soybean lot to 0.7%, leaving it at $14.68 ½ a bushel.

And corn gained support from its greater sensitivity to Argentine heat, with soybeans viewed as a more resilient crop, and having their sensitive development period a little bit later.

US Commodities said: "The rains in southern Brazil will not aid the corn - it is too far along. The rain will greatly aid the soybeans."

Chicago corn for March gained technical support too in finding support at the $7.35-a-bushel level viewed as a key chart point.

The contract managed to recoup early losses to close up 0.25 cents at $7.40 ½ a bushel, staying above its hard-won 75-day and 100-day moving averages.

Crop spreads

Wheat found no such support, closing in Chicago down 1.0% at $7.79 ½ a bushel for the March contract, whose premium over shrank to less than $0.40 a bushel.

Much was seen as technical selling, with the grain being on the end of short wheat, long corn/soybean bets.

Indeed, the data defied some positive news, with the US winning Taiwanese import trade, and revealed as sending 167,000 tonnes of wheat to the European Union this week under quota, the biggest volume so far in 2012-13.

With other signs of buying around, such as Iraq seeking offers, Paris wheat did better, closing unchanged at E244.75 a tonne for May delivery.

Tale of two beans

Among soft commodities, New York cotton for March edged 0.01 cents lower to 82.95 cents a pound after US export sales of the fibre disappointed, coming in at 137,000 running bales, the lowest in nearly three months.

But robusta coffee maintained its upward progress, helped by a rebalancing of the Rogers International Commodity Index in favour of the bean over New York-listed peer arabica.

Furthermore, trade data from the International Coffee Organization showed demand for robusta clearly more robust than that for arabica on export markets.

Exports of robusta soared 24% to 46.6m bags in 2012, while shipments of arabica beans eased 0.8% to 66.5m bags.

London robusta coffee for March rose 2.1% to $2,009 a tonne, while March arabica beans eased 0.5% yo 146.95 cents a pound.