Argentine soybean farmers' problem of too little rain may have changed to one of too much, Oil World has said, warning of an "alarming rate" of spread of disease in neighbouring Brazil too.

The influential oilseeds analysis group said its forecast, made at the end of November, of a 48.0m-tonne Argentine soybean crop now that many parched areas had received rain.

However, Oil World signalled that it did not expect the harvest to come in much higher, given "severe flooding" in some producing districts, with Cordoba, Santa Fe and northern Buenos Aires province receiving too much rain in December.

 "We do not share the view of some Argentine observers who place the crop at 50m-52m tonnes, which we consider too optimistic at this state due to the recent heavy rainfall and flooding in several major areas," it said.

"The Argentine crop still has a long way to go and requires favourable weather up to April."

Official Australian statisticians last month forecast Argentina would produce a 57m-tonne soybean crop.

Disease threat  

Oil World added that the soybean crop in Brazil, the world's second biggest producer of the oilseed after the US, had become "jeopardized" by Asian rust fungus, which has "spread at an alarming rate".

Untreated fields can lose 80% of production to the fungus, which by last year was estimated to have caused $10bn of damage in Brazil since it was identified there around the start of the millennium.

However, farmers in the state of Mato Grosso already had some of their 2009-10 crop in the bin, having planted early-maturing varieties in an effort to make sure they did not miss out on buoyant global prices.

"We expect sizable new-crop exports of Brazilian soybeans and products already in January," Oil World said.

The group added: "Overall, South American soybean production is set to increase very sharply from last year's drought-reduced level."

"If confirmed, this should pull down prices of soybeans and products in early 2010."