Flooding in Argentina has reduced the expected production of soybeans in the country at 4.8 million tons, despite the fact that better-than-expected yields in dry areas offset some of the losses, according to local analysts.

The soybean meal futures on the Chicago Mercantile exchange increased by 51% from early April to the highest level in Nov 2014, because of the increased threat of flooding in Argentina.

The crop forecasts now range from 52 to 56.5 million tons. Harvest slowed record-breaking rains in Northern parts of the soy belt," and the Grain exchange of Buenos Aires has reduced its crop forecast to 56 million tonnes from 60 million In either case, the result will be less production of 60.8 million tonnes last season.

Higher yields in the provinces of Buenos Aires and La Pampa, which escaped the flooding, may force the exchange to maintain its crop forecast at 56 million tonnes in the weekly report, which it will publish on Thursday.

But analysts located in Buenos Aires consultancy AgriPAC announced that the losses from floods far outweigh the increase in expected in areas with higher productivity.

Lost 8 million tons of production during the floods. Yields in Buenos Aires is good, but not high enough for the climate disaster that occurred in the provinces of Entre Rios, Cordoba and Santa Fe.

These provinces suffered from the hurricanes first three weeks of April. According to analysts, 70% of the 2015/16 crop has been collected compared to 90% in the same period last season.

American futures soybean meal rose to an 18-month high on Friday as short covering and concerns about the reduction of exports from Argentina contributed to the increase.

The country is a major world shipper fodder for livestock and the third supplier of soybeans.

The situation is quite complex, because the earth is too much water in the affected provinces. Noticed a huge delay harvest, analysts said. 56 million tons, estimated grains exchange, realistic, and volume can even be worse depending on the weather conditions in the next few weeks.

Grain exchange Rosario this month lowered its forecast of the soybean crop 2015-16 to 55 million tons to 59 million tons from the previous forecast.

The government reported that approximately 1.2 million hectares will not be harvested due to rain, which will lead to the loss of production of nearly 6 million tons.

The Ministry of agriculture of the USA has reduced its forecast for production volume in Argentina by 2.5 million tons to 56.5 million

Source: Thomson Reuters