Rain hurts Argentine crops

The Buenos Aires grains exchange lowered the bar further on Argentina's soybean and corn harvests, saying a crop tested by drought and frost was now suffering from floods.

The Bolsa de Cereales cut by 1.1m tonnes to 39.9m tonnes its forecast for the soybean harvest in the world's third ranked exporter, the exchange's second downgrade this month.

The cut, which put a year-on-year fall of 18.9% in Argentine soybean production on the cards, reflected both a continuing drop in yields and rains last weekend which brought flooding to much of the major producing province of Buenos Aires.

The rains brought "flooding over a wide area", to a "significant" number of hectares of farmland, estimated at 30% of the 500,000 hectares or so still to be harvested in the centre and west of the province.

The inundation extend a cycle of weather threats which slashed hopes in Argentina, which had initially looked set for bumper crops.

'Crop is in trouble'

The downgrade took the Bolsa estimate well below those of the Argentine farm ministry, which has pegged the crop at 41.5m tonnes, and the US Department of Agriculture, which has a 42.5m-tonne figure.

Oil World on Tuesday warned it may cut its own estimate to 40.0m tonnes, citing continued abandonment of sowings, although citing early-2012 drought rather than the recent rains.

"The soybean crop is in trouble in northern Argentina," the influential analysis group said.

The Bolsa de Cereales, which estimated that harvest was now 89.3% complete, up six points on the week said that the yield had fallen to 22.1 quintals a hectare, down 0.6 quintals a hectare over the week.

Corn downgrade

For corn, the exchange cut its forecast by 500,000 tonnes to 19.3m tonnes, again citing water damage and lower recent yields.

The government estimates the crop at 20.1m tonnes, and the USDA at 21.5m tonnes.