February 23, 2009

Argentina's 2008/09 soy crop will fall to 42.5 million tonnes from the 48 million collected in the previous season, mainly due to drought, the Buenos Aires Grains Exchange said on Friday (Feb 20).

Recent rains have provided moisture to farmlands that had gone dry over the last year and more precipitation is expected.

Farmers finished harvesting soy last week, having planted 17.75 million hectares.

According to the exchange, weather forecasts could be more moderate to intense showers in northeast and northwest Argentina over the next few days, which will continue to guarantee very good conditions for crop development.

The government has not yet released an estimate for soy production, but the USDA foresees an Argentine crop of 43.8 million tonnes, down from the 46.2 million tonnes produced in 2007/08.

The exchange said Argentina's corn crop will be reduced to 14 million tonnes, a 25.6 percent drop compared to the previous season.

The exchange also said corn plantings were cut this season due to the worst rain shortage in decades as well as uncertainty generated by a conflict between farmers and the government over export taxes.

Producers went on strike last year, prompting a political crisis for President Cristina Fernandez, and farmers have threatened more protests as the sector remains on edge.

Recent rains have provided moisture to farmlands that have gone dry over the last year, but the precipitation arrived too late to help many corn fields.

Argentina's Agriculture Secretariat expects 2008/09 corn production to total between 12.5 million and 13.8 million tonnes, down sharply from 22 million tonnes in the previous season.