March 30, 2009

Argentina's Buenos Aires Cereals Exchange on Friday cut its forecast for 2008-09 soy production by 1.3 million tonnes to 41.2 million tonnes.

Early drought across the farm belt and continued dryness in the northern fields caused the drop in expectations, the exchange said in its weekly crop report.

With 14.2 percent of the crop harvested to date, yields have come in lower than initially expected, the exchange said.

In addition, there had been hopes that yields would be high in the northern provinces where late planting was concentrated.

But in the northern province of Chaco, there hasn't been a significant rain in 30 days and there's starting to be "an important deterioration in the crop condition," the exchange said.

With 34.2 percent of the corn harvested to date, farmers are seeing disappointing yields due to the drought.

The exchange trimmed its forecast for 2008-09 corn production to 13.5 million, compared to 13.8 million forecast last month.

Yields are expected to average a low 6.2 to 6.3 tonnes per hectare this season due to the severe drought stress.

Farmers have harvested 94.5 percent of the 2008-09 sunflower seed crop to date, 12.8 percentage points ahead of the harvest pace at this time last year.

Total production is seen at 3.0 million tonnes, down 1.6 million tonnes from last season due to decreased planting and drought, according to the exchange.