Argentina Exchange cuts 2008-09 soy forecast to 39.4 million tonnes

Argentina's Buenos Aires Cereals Exchange on Friday (Apr 3) cut its forecast for 2008-09 soy production by 1.8 million tonnes to 39.4 million tonnes.

Early drought across the farm belt and continued dryness in the northern fields caused the drop in expectations, with yields coming in worse than previously expected, the exchange said in its weekly crop report.

The exchange said 26.2 percent of the crop has been harvested to date.

There were expectations that late-planted crops in northern provinces like Chaco and Santiago del Estero would benefit from rains in January and February, helping boost overall yields. But fields there have since suffered from dryness and high temperatures, leading to lower-than-expected yields and pushing down expectations for national production, the exchange said.

With 49.9 percent of the corn crop harvested to date, farmers are seeing disappointing yields due to the drought and hot weather. The exchange this week kept its forecast for 2008-09 corn production at 13.5 million but said it may lower the number if weather conditions don't improve to help yields.

Farmers have harvested 97.8 percent of the 2008-09 sunflower seed crop to date. Beneficial weather conditions in southern fields of Buenos Aires province are helping improve yields and this may lift overall output above a current estimate of three million tonnes, according to the exchange.