Argentine rains to boost profits, soy harvests

Rains across Argentina in the past two months will boost profit at Cresud Sacifya, the country's biggest agricultural company by market value, as soy output recovers from drought, Raymond James Financial Inc said.

Recent precipitation across Argentina's main agricultural zones has improved the prospects for higher soy yields at Cresud, the country's biggest farmland owner with an area the size of Delaware.

Argentina, the world's third-biggest grower of the oilseed, may produce a record 53 million tonnes this year, according to Acsoja, the nation's producers association. Dry weather reduced the previous crop to 32 million tonnes.

The drought, which lasted two years in parts of Argentina, caused Cresud's agriculture and livestock businesses to lose US$16.5 million in the fiscal year ended June 30, compared with a 43.6 million peso gain in the previous period, the company said September 9. Schumacher said it's too early in the crop cycle to estimate earnings for the current year.

More than 100 millimeters of rain fell in parts of the soy belt from Sept. 1 to Oct. 31, according to Agriculture Ministry statistics. In farms around Rafaela, a town in Santa Fe province, precipitation was 80 millimeters in September and 52 millimeters in October, the data show.

Soy futures for January delivery dropped 17 cents, or 1.7 percent, to US$9.55 a bushel Nov. 6 on the Chicago Board of Trade. The drop capped a weekly decline of 2.2 percent, while prices have fallen about 2.6 percent this year.