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Argentina soy faces make-or-break weeks with rains ‘erratic’ - Rosario exchange

BUENOS AIRES, Feb 4 (Reuters) - Argentina's soy crop faces a make-or-break period ahead as the risk of drought creeps back, with rainfall "erratic" and heavy precipitation looking unlikely until the second half of the month, the Rosario grains exchange said in a weather report.

The South American country, the world's top exporter of processed soy and the second largest corn exporter, was hit by a bad drought from December until the middle of January, which led to harvest forecasts being cut sharply.

Heavy rains in late January helped to cap crop losses, but the threat of a renewed dry spell has risen again despite scattered rainfall in recent days.

"The zones with water scarcity and drought advanced in the last seven days from 50% to 60% just when 90% of the first soybeans fully entered the critical period in the core region," the exchange said in its latest weekly report.

"There are no major rains in sight for the second week of February, they could return in the second fortnight."

The exchange said that there were "serious risks" that soy production could be hit as hard as early-planted corn was by the December-January drought, which scorched fields and hammered crop yields around the farm belt regions.

It said current rainfall was scattered, leaving some areas well watered while others had shortfalls, including in southwest Buenos Aires province, the center of Córdoba and the center of Santa Fe - key soy-growing regions.

"Humidity is very tight, there is a lack of water and the need of millimeters (of rain) is urgent: they are needed now," the exchange said. "What happens with the rains in the next fifteen days is going to be decisive."

(Reporting by Nicholas Misculin; Editing by Adam Jourdan and Jane Merriman)

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