Rain may become bane for Argentina soy

Argentina's record soy crop may yield less than expected as downpours threaten to cause beans to rot and fungal diseases to spread.

While the rain has provided boost to the developing crops and alleviate drought worries, excessive rains may cause too much humidity in soil of major producing areas and bring about fungi and pests that harm plants and pare yields.

This may also cause harvesting delays, which in turn could lead to beans rotting, said Eduardo Anchubidart, who heads the Buenos Aires Cereals Exchange's crop-forecast division.

If it continues to rain, fungal diseases which affect pods may spread to the beans and could lower yields, he said.

Argentina, the largest soy producer after the US and Brazil, is forecast to produce a record crop this year after rain caused by the El Nino weather pattern boosted yields. Fungal disease and the rotting of beans could lead output to fall short of the exchange's estimate for more than 52 million tonnes of the oilseed, Anchubidart said.

The USDA forecasts Argentina's soy crop to rise to 53 million tonnes from a drought-hit 32 million in 2009.

About a third of Argentina's 19 million hectares of soy crops are located in the Soy Belt, where El Nino has triggered above-average rainfall. Harvesting in the area, which has the highest yields in the country, starts this week and continues through March. Yields in the area are about 35 to 40 tonnes per hectare.

As much as 100 millimetres or 3.9 inches of rain fell in parts of the area between February 18 and 21, according to estimates by the Rosario Cereals Exchange.