Argentina's 2011/12 soy harvest has come at an expected 39.9 million tons, but 20% lower than the previous year's crop after a Pampas dry spell dashed early-season hopes of bumper crop, the Buenos Aires Grains Exchange said on Thursday.
Last year's soy crop was 48.9 million tons, according to government data. The country's biggest soy crop ever was the 53 million tons collected in 2009/10.
The Agriculture Ministry predicts 2011/12 soy output of 40.3 million tons after a December-January drought dashed early hopes for a bumper crop.
But the Exchange said the few remaining areas to be harvested were so ravaged by the six-week dry spell, followed by harvest-disrupting floods that 39.9 million tons remains its final estimate.
”There are still some fields to be harvested in western, central and southeast Buenos Aires province (Argentina's leading farm region),” the exchange said in its weekly crop report.
The US Department of Agriculture forecast a 41 million-ton soy take in Argentina this season. The production drop comes as worries mount about US grain supplies.
What looks to be the worst US drought in a quarter of a century has sparked a commodity rally, with key grain prices hitting highs. The last time this happened, in 2010 when Russia suffered a massive crop failure, it caused food crises in vulnerable countries around the globe.
Traders said buyers in Europe, North Africa and the Middle East had pulled back on regular purchases, opting to wait for prices to cool off.
Global food demand is expected by the United Nations to double by 2050 as world population hits 9 billion. Argentina, which boasts a fertile Pampas grains belt bigger than the size of France, will be crucial to feeding an increasingly hungry world.
Argentina is also the world's second exporter and the government estimates this season's production at 20.1 million tons after the drought melted early expectations of a 2011/12 crop well over the 23 million tons harvested in 2010/11.
The exchange forecasts corn output at 19.3 million tons this season while the USDA sees Argentine production of 21.0 million tons.
Argentina's 2011/12 corn harvest is 86.1% done, marking progress of 5.1 percentage points over the last seven days but lagging the previous season's tempo by 2.8 percentage points, the Exchange said.
Argentina is the world's sixth biggest wheat exporter and is the top supplier to neighbouring Brazil. The USDA forecasts Argentina's wheat production in the 2012/13 crop year at 12.0 million tons, down from 14.5 million tons the year before.
Argentina's 2012/13 wheat plantings are set to fall 20% this season to 3.7 million hectares, the exchange says.
Argentine growers say profits are hurt by export curbs imposed on wheat and corn as part of the state's push to ensure domestic food supplies.
Wheat prices have risen in Argentina since the government approved large 2012/13 export volumes last month, a move welcomed by growers even though it may have come too late to bolster this year's plantings.