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Argentina's soy crop still big

02/07/2013 @ 1:34pm

Despite a dry spell, Argentina's 2012-13 soybean crop will likely come in at a near record 50 million metric tons, up about 25% from last year, the Buenos Aires Cereals Exchange said Thursday.

The production estimate marks the first from the Buenos Aires Exchange, which provides the country's most closely watched private crop report. The exchange pegged the 2011-12 crop at 39.9 million tons, while the government's estimate is 40.1 million tons.

Farmers boosted planting area this season and a wet spring and early summer had fueled hopes of a record crop. However, a hot, dry January taxed some of the crops and farmers are concerned that more rain is needed soon to stem losses in yield potential. Argentina's largest soy crop was 52.7 million tons during the 2009-10 season.

Soybean planting is virtually complete, with the harvest slated to kick off in March.

The forecast "reflects the deterioration of a high percentage of the fields over the past weeks and the delay in planting in many areas" because of flooding earlier in the season, the Buenos Aires exchange said in its weekly crop report.

Farmers had hoped for wet weather over the past week, but were disappointed.

Andres Rosenberg, who farms grains and cattle on 720 hectares in Buenos Aires province and 1,100 hectares in Entre Rios province says his fields are doing well in Entre Rios, but are suffering in Buenos Aires.

The storm expected last weekend was a no-show, with not a drop soaking his fields in Buenos Aires. Yields in the soy fields he planted there early this season will likely suffer a drop in yields of 15% to 20%, he said. "We're worried, and there's not much we can do," Mr. Rosenberg said.

And there isn't much relief in sight. Next week, the far north of the farm belt is expected to get a soaking, but the key central fields are likely to get less than 10 millimeters, according to the exchange. That will do little to ease worries over the dryness.

Argentina is the world's top soymeal and soyoil exporter and ranks third in soybean exports behind Brazil and the U.S. Worries over the dry weather in Argentina has helped to drive up global soybean prices in recent weeks. Markets are counting on bumper soybean crops from Argentina and Brazil to build up global stocks which are very tight due to droughts hitting crops in both South and North America last season.

Corn planting has also just been wrapped up, with the crop facing the same challenges as soy due to the dry weather.

The Buenos Aires exchange raised its corn area forecast to 3.7 million hectares, up from 3.4 million hectares estimated last week. Private analysts are expecting a record crop of between 26 million and 28 million tons, up from 21 million tons during the drought-plagued 2011-12 season.

Write to Shane Romig at shane.romig@dowjones.com

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