Argentina's biggest grains exchange slashed its forecast for soy production to 43.1 million tonnes for 2012 as the extent of drought damage becomes clearer, especially in Northern provinces. The Soyabean production target was earlier estimated as 44.5 million tonnes.
The drought across the South American grain-belt curbed supplies in Brazil and Argentina, which led to shrunk in soybean crop to an estimated 65.2 million tonnes, down nearly 2 million tonnes from the March forecast of 67.1 million tonnes.
Meanwhile, the Agriculture Ministry said that Argentine soy crushing activity rose 11 per cent in February from the same month last year to 2.30 million tonnes.
Argentina is the world's top supplier of soyoil and soymeal and crushing activity has increased in recent years due to investment in plants, most of them near the port city of Rosario.
The crushers produced 435,824 tonnes of soyoil in February 2012 while soymeal output also rose 11 per cent in February 2012f to 1.7 million tonnes.
In February 2012, Argentine processing plants crushed 4.8 million tonnes of soybeans. Growers are currently harvesting 2011/12 soybeans and drought damage is lowering expectations for production.