Storms lash Pampas, Argentine farmers start to fret

Wed Aug 15, 2012 5:05pm EDT

* Southern Hemisphere spring corn, soy planting set to start

* Argentina world's No. 2 corn exporter after United States

* Hope high for Argentine crop after U.S. drought hit supply

* Some farmers begin to worry about excess moisture

By Hugh Bronstein

BUENOS AIRES, Aug 15 (Reuters) - After watching their corn and soy plants get cooked alive by drought last season, Argentine farmers welcomed the recent onset of rains as they gear up to sow the new crop.

But storms in the last week have been so intense that growers are starting to worry that their fields could become swamped before September and October planting. The concerns come as an increasingly hungry world looks to Argentina to make up for low U.S. corn yields that have sent global prices soaring.

The South American country is the No. 2 corn exporter after the United States, which has recently been hit by drought. Argentina is also the world's No. 3 soybean supplier.

Ground that is too dry and hard - or too soggy - can slow planting, which would frustrate farmers eager to lock in high international grains prices.

The heart of the Pampas farm belt - including parts of Entre Rios, Santa Fe, La Pampa and Cordoba provinces - was soaked by up to 50 millimeters (2 inches) of rain on Tuesday, according to the National Weather Service. Some areas of agricultural powerhouse Buenos Aires province had up to 100 millimeters.

Elsa Flores, who helps manage a small farm in the Buenos Aires town of Carlos Casares, said they received 60 millimeters of rain in two days toward the end of last week as Argentina headed into the Southern Hemisphere spring planting season.

"It was a dry winter but it has rained so much this week and last that moisture levels are good," she said. "We've gotten enough. It would be best for the rain to let up at this point."

That is unlikely, according to climatologist Ezequiel Marcuzzi at local consultancy ClimaCampo. He forecasts heavy showers on Thursday and Friday in northern and central Buenos Aires, Entre Rios and Santa Fe.

"By the weekend, we could have excess moisture in these areas," Marcuzzi said. "Rains are always welcome in the Pampas at this time of year. But too much can become a negative factor."

Moisture caused by El Nino - related to a warming of the ocean surface off the western coast of South America that alters storm tracks - is expected to minimize the threat of drought in the upcoming season.

Grains exporters Cargill, Bunge, Noble and Louis Dreyfus have major operations in Argentina. The country is the world's top supplier of soyoil, used in the booming biofuels sector, and soymeal, used to feed cattle.

Drought-stricken crops and record-high grain prices have strengthened critics of the biofuel industry, adding fears of a food crisis to their contention that it does not ultimately reduce carbon dioxide emissions.

Demand for soymeal is driven by countries such as China, where the fast-growing middle class has acquired a taste for beef.

President Cristina Fernandez wants to keep the farm sector humming as her government confronts lower economic growth caused in part by Europe's debt saga and lower demand from No. 1 trade partner Brazil. Soy and corn are key sources of hard currency.

Fernandez, often criticized by business for her unorthodox and hard-to-predict policies, has had a troubled relationship with farmers, who shook her government with protests over a tax increase in 2008. Tempers have calmed since then as farm revenues benefited from soaring world grains demand.

Soybean futures prices rose 2 percent on Wednesday, adding to worries about tightening supplies, while corn and wheat posted smaller gains.

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