February 27, 2012

Rosario exchange cuts Argentina's soy outlook

Argentina's soy crop is expected to reach 44.5 million tonnes, down five million tonnes from previous month's forecast due to drought damage, Rosario grains exchange said.

The grains exchange said sharply lower yields and unusable fields for harvest prompted it to slash its previous forecast for a 2011-12 crop of 49.5 million tonnes in the world's No. 3 soy exporter.

"The losses are significant in main producing provinces, especially Cordoba," an exchange report said, estimating the average yield at 2.4 tonnes/hectare.

Weeks of dry weather in December and into January also battered corn crops in the South American country and Rosario cut its corn production forecast to 19.8 million tonnes from the last outlook of 21.4 million tonnes.

"Corn production won't exceed 20 million tonnes because of the deterioration in the average yield and lost area," the report said. It projected average yields at 5.5 tonnes/hectare.

Rains in February have stemmed potential soy losses and late-seeded soy could continue their recovery, the exchange added.

Argentina, the world's second-biggest corn supplier after the United States, gathered a record 23 million tonnes of corn last season, according to government data. Soy production was 48.9 million tonnes.