Argentina's wheat crop may fall further than many analysts are betting on, despite much-needed rains which have boosted development, and improved conditions for planting corn.

The Buenos Aires Grains Exchange said that after rains hit three of the country's four main wheat-growing areas "it may be possible to expect that the average national [yield] could be 28% higher than in the previous cycle.

It added: "The showers during this month allowed for a recovery in surface moisture levels, recharging the soil profile in many areas."

However, with the exchange pegging plantings down nearly 40% at a century low of 2.8m hectares in 2009-10, the yield forecast implies a crop of at most 7.4m tonnes, even if all sowings go on to be harvested.

'Intense frost'

That is 600,000 tonnes less than the latest US Department of Agriculture estimate and, if it proves correct, would likely take Argentina's wheat exports for 2009-10 even lower than the 2.5m-tonne forecast.

Furthermore, crops face an "intense frost over the next days, which could damage the crops as they enter the yield-determining phase of development", the exchange added.

Argentina two years ago produced 18.0m tonnes of wheat, and exported 11.2m tonnes, before drought set in.

Farmers have this year also been encouraged by falling wheat prices to plant other crops.

Corn progress 

The report added that 14.5% of the 1.88m hectares forecast for corn sowings this year had been planted, although uncertain market conditions were prompting some hesitation among growers.

In 2008-09, Argentina planted 4.6m hectares of wheat , of which 4.2m hectares were harvested, according to US data, with production estimates ranging from 8.4m-8.7m tonnes.