South American record soy crop hurt by disease

 

 

Soy fungi are spreading across Brazil and Argentina, the world's second- and third-largest producers, threatening record crops as demand gains.

 

Argentine farmers confront an outbreak of Frogeye Leaf Spot, which can cut yields by 12% and has reached the heart of the Pampas farmlands, said agronomist Luciano Ascheri.

 

In Brazil, more than 1,200 cases of Asian Rust have been reported, compared with 636 at this time last year, according to Embrapa, a government agricultural agency.

 

Downpours caused by El Nino encouraged the outbreak, which may reduce supplies as global consumption rises by about 6.4% this year, according to the USDA.

 

USDA estimates showed that Brazil's harvest will rise to 65.2 million tonnes from 57.2 million tonnes last year, while Argentina's crop will rise to 53 million tonnes from a drought-hit 32 million tonnes in 2009.

 

''The disease has spread out really quickly because of the rains, and may affect yields,'' said Embrapa researcher Claudia Godoy. In 2003-04, the country's worst-ever outbreak destroyed 8% of the crop.

 

Frogeye is relatively new to Argentina's soy farms, said Ascheri, an agronomist at the Buenos Aires-based Argentine Association of Regional Agricultural Experimentation Consortium.

 

Prospects of bumper South American crops caused soy futures prices to fall to their lowest in more than three months, declining 17.75 cents, or 1.9%, to US$9.14 a bushel on the CBOT last week.

 

''When the Brazilian and Argentine crops start entering the market in February and March, they will put a bit more pressure on prices,'' Flavia Moura, a grains and soy analyst at Newedge USA LLC, said.

 

Together, the two South American countries will export 33.9 million tonnes of soy in 2010, compared with 37.4 million tonnes from the US, where farmers will produce 91.5 million tonnes, according to USDA.

 

Brazilian farmers spent US$1.7 billion in fungicides last year to fight the disease and lost 571,800 tonnes to the fungus, according to Embrapa. Asian Rust was first found in Brazil in 2001 and peaked two years later when it wiped out 4.6 million tonnes of the oilseed, reducing the harvest to 49.8 million tonnes.