UPDATE 1-Argentine wheat hit by fungi as rain delays other plantings

Tue Oct 23, 2012 2:46pm EDT

* Dry weather next week seen better for corn, soy seeding
    * Corn planting stuck in the mud after months of rain
    * Grains prices soaring due to dry Russian, US weather
    * Consumer nations look to Argentina to bolster food stocks


    By Hugh Bronstein
    BUENOS AIRES, Oct 23 (Reuters) - Flooding in Argentina's
Pampas grains belt has allowed fungus-based diseases to attack
wheat crops already hobbled by scant planting while more wet
weather puts off soy and corn seeding until next week, analysts
said on Tuesday.
    Storms have pelted the South American grains powerhouse
since August, raising uncertainty about crops needed to bolster
food stocks after dry weather slashed output in other major
producers such as Russia, Australia and the United States.
    With the weather forecast unstable for the rest of this week
and rains seen at the weekend, climatologists said farmers
should wait to restart corn and soy planting.
    "This is the third month in a row with excessive rains,"
said German Heinzenknecht, a meteorologist at the Applied
Climatology Consultancy.
    "The forecast is unstable for the next three days with rains
returning to the nucleus of the farm belt over the weekend," he
said. "Monday should open a five- to seven-day period of
sunshine, so corn and soy farmers should wait at least until
Monday to plant."
    Northern and western Buenos Aires province as well as part
of Cordoba and Santa Fe have received an average of 50 to 60
millimeters (2 to 2.5 inches) of rain in recent days,
Heinzenknecht added.
    
 
    
    The U.S. farm belt is coming off its worst drought in half a
century and Russia's wheat crop is down more than a quarter from
last year. The losses have lit a fire under Chicago grains
futures, propelling wheat 32 percent higher since January, while
soy and corn have jumped 28 percent and 16 percent,
respectively.
    Argentina's upcoming wheat harvest is expected to shrink 17
percent from last season to 11.5 million tonnes, the Agriculture
Ministry said last week, as farmers skirt export curbs by
shifting to other crops. 
    "In the wheat sector, the appearance of diseases has become
a worry, and plants have been lost in many areas since their
roots were starved of oxygen," a Rosario grains exchange report
stated.
    Farmers criticize the state-centric, interventionist
policies of President Cristina Fernandez. However, with the
United Nations projecting world food demand will double by 2050,
investor interest in the sector remains strong.
    Argentine growers are shying from wheat to avoid export
limits that do not apply to the country's main farm export, soy,
which will start being planted this month and could be set for a
record year as rains enable farmers to widen planting area.
    The flow of grains from Argentina is important to exporters
such as Cargill, Bunge Ltd and Noble Group Ltd
, which operate grains terminals along the Parana
River, leading to the shipping lanes of the South Atlantic.   
    Unusual weather patterns across central-eastern Argentina,
Uruguay and the extreme south of Brazil dumped high volumes of
rain in August.
    At the end of September, showers related to the El Nino
phenomenon lashed most of the agricultural bulwark province of
Buenos Aires, plus south-central Santa Fe, Entre Rios,
Corrientes and Misiones provinces, climatologists say.
    El Nino, characterized by unusually warm ocean temperatures
in the tropical Pacific, often brings rain to the Southern Cone.
    On the positive side, marginal growing regions such as San
Luis, La Pampa, Santiago del Estero and Chaco provinces should
get tropical-type weather over the months ahead, giving those
areas more productivity potential than they usually have.
    The U.S. Department of Agriculture sees Argentina's 2012-13
soy output at a record 55 million tonnes, corn at a record 28
million tonnes and wheat at 11.5 million.
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