* Floods breed fungus that threaten 2012/13 wheat quality
* Media says gov't cuts wheat export permits by 25 percent
* Last week's storms seen followed by moderate rains
By Hugh Bronstein
BUENOS AIRES, Dec 10 Key Argentine corn and soy
areas have been drenched by storms this month, keeping some
fields under water and delaying planting while toxic fungus,
bred by the excessive moisture, moves in on wheat fields.
The South American country is a major exporter of all three
crops at a time of galloping prices fueled by high world food
demand and thin supplies after disappointing harvests in
breadbasket producers Russia, Australia and the United States.
Chicago wheat futures are up 29 percent this year while soy
has risen 23 percent and corn 13 percent. Consumer nations want
Argentina to step in with the supply needed to cap prices and
ease inflation at a time of slow growth in many economies.
But the news from the Pampas farm belt has not been good.
Satellite weather maps show Argentina's top grain province
Buenos Aires has gotten up to 200 millimeters of rain since Dec.
1, turning prime corn and soy fields into unplantable mush.
After harsh storms from August to October flooded wide
swathes of Argentina's Pampas farm belt, even normal amounts of
rain at this point can sustain the waterlogged farm conditions.
"The intense rains of October have returned," said Eduardo
Sierra, climate adviser to the Buenos Aires Grains Exchange.
"The rains are making (wheat) harvesting difficult, with
losses to both yield and quality," he added. "Some corn fields
are having to be replanted or abandoned."
Northern Buenos Aires and parts of Entre Rios province will
get up to 30 millimeters of rain on Monday, with moderate
showers expected throughout the farm belt for the rest of the
week, said Tomas Parenti, an agronomist at the Rosario grains
Argentina, which curbs overseas wheat and corn shipments as
a way of ensuring domestic food supplies, will trim its 2012/13
wheat export quota to 4.5 million tonnes from a previous 6
million due to a smaller than forecast harvest, La Nacion
newspaper reported over the weekend.
There was no government confirmation of the report but wheat
farmers contacted by Reuters said they had expected the cut in
export licenses due to the flooding and outbreaks of Fusarium
fungus, which robs wheat of its protein.
"It's probably true that they will cut export permits, but
don't expect an official announcement," said David Hughes, a
Buenos Aires wheat farmer.
Wheat's planted area shrank by 24 percent this season to 3.5
million hectares (8.6 million acres) as farmers shifted to other
crops in order to skirt export curbs.
Argentina's government forecasts the 2012/13 wheat crop at
11.1 million tonnes, recently marked down from 11.5 million. But
with more than 26 percent of the harvest already collected,
initial yields have been poor, prompting some analysts to reduce
their projections to the 9.5 million tonne range.
The Buenos Aires Grains Exchange warned last week that it
might cut its 10.1 million tonne projection while the United
States Department of Agriculture (USDA) sees Argentina's wheat
harvest at 11.5 million tonnes.
The USDA forecasts Argentine 2012/13 soy at 55 million
tonnes and corn at 28 million tonnes.
(Editing by Bob Burgdorfer)