Argentina soy crop seen at record-high amid rains

Heavy rains that have flooded some Argentine soy fields and boosted US soy futures this week are seen lasting until the harvest, but production is still expected to reach record levels for now.

Drought last season battered soy output in Argentina, the world's No. 3 exporter, but weeks of torrential rains are raising concern that crops could be damaged by flooding and outbreaks of fungal disease.

Soy futures in Chicago rallied almost 2% on Monday (Feb 22) as wet weather threatened the soy harvest in Brazil, the world's No. 2 supplier, and on concerns that flooding had harmed some Argentine beans.

Despite the wet weather, Buenos Aires Grains Exchange maintained its forecast for record production of 52 million tonnes last week, but agronomists are warning there could be losses if the unusually heavy rains continue.

"We're still maintaining our forecast for the moment but it all depends on how crops develop in the main soy belt in March," said Esteban Copati, a crop analyst at the exchange.

Argentina's Agriculture Ministry, which has yet to estimate 2009-10 soy production, said earlier that a few crops in southern Cordoba had already been lost.

Soy harvesting begins in earnest in April in the South American country and the current wet weather is expected to last until June, meteorologist Stella Carballo at the state-run National Institute of Agricultural Technology (INTA) said.

The areas most at risk are southeastern Cordoba, southwestern Santa Fe and northwestern Buenos Aires province, Carballo said. The three provinces account for at least 80% of Argentine soy production.