Argentine soy expansion seen coming to an end

The long run of increasing soy plantings in Argentina, which has expanded its production five-fold over the last 20 years, is coming to an end thanks to the growing appeal of other crops, according to reports.

Argentine soy output will, in 2010-11, fall back by some 4 million tonnes from the record 54 million tonnes likely to be harvested this season, a report from the USDA's Buenos Aires bureau forecast.

The slide reflects the appeal of corn, cotton, sunflowers and ranching, and a slowdown in clearance of fresh land, which will halt Argentina's more than two-decade trend of ever increasing soy area.

Furthermore, yields are likely to fall short of those this season, which were boosted by persistent rains attributed to the tail end of the El Nino weather pattern which caused drought last year.

Meanwhile, higher moisture levels have increased the appeal of resowing pastures, to exploit cattle prices which have been boosted by a return to stock building after last year's drought forced the elimination of some herds.

Rains have also played to a desire by farmers to "return to rotation practices" after a period when market and weather conditions have favoured soy, which generate "high returns to Argentine producers given current world and domestic prices", the report said.

Some fields have grown soy for several successive seasons, a practice which raises the risk of a build-up in pests; while corn was likely to show an increase in sowings due to slightly better corn season.