January rains may encourage Argentine farmers to crack on with soybean sowings, and there is hope yet for crops already sown - if moisture arrives soon.

Recent rainfall "will encourage the planting of second-crop soybeans", of which an unusually high 60% remained left to sow as of last week, with many growers holding off because of dry weather.

And while crops already in the ground were showing "severe stress", this too could be alleviated if rains improved, after the "excessive dryness" last month.

Most soybeans in north west Buenos Aires province, southern Cordoba and Santa Fe "are not yet flowering and could pull out of severe stress if the crop receives rainfall in January and February", USDA analyst Denise McWilliams said.

The comments are the first by the USDA since fears for South American dryness started in earnest, driving a rally in corn and soybean prices from mid-December.

And they follow a band of rain which offered, at least temporary, drought relief to much of Argentina.

'Moisture stress'

Nonetheless, the USDA cut by 1.5m tonnes to 50.5m tonnes its forecast for the 2011-12 Argentine soybean crop, the world's third-biggest, halving the uplift it had expected from last season's harvest.

And it reduced by 3.0m tonnes to 26.0m tonnes its estimate for the Argentine corn harvest, citing "moisture stress" caused by temperatures above 38 degrees Celsius (100 degrees Fahrenheit) last month.

"About half of the early corn was entering the silking and tasselling stages – the stages most susceptible to drought," Dr McWilliams said.

She added that "some specialists suggest from four-to-seven inches of rain will be necessary to replenish soil moisture and relieve plant stress for continued crop progress", adding that some farmers in light soils were giving up on their crop, and using it for grazing or hay.

Brazil revision

The USDA also lowered its estimate for the soybean harvest in Brazil, by 1.0m tonnes to 74.0m tonnes, citing poor rainfall in southern areas in November and December.

"Below-average rainfall in the south during December reduced potential yields, especially in regions that were planted early where crop stage was in the critical flowering and pod-filling stages during December's drought."

However, it kept its estimate for the Brazilian corn harvest unchanged at 61.0m tonnes.

The USDA also maintained at 7.6m tonnes its forecast for the soybean crop in Paraguay, which has also suffered dryness, and has suffered downgrades from some other analysts, such as noted scout Michael Cordonnier, who earlier this week cut his forecast to 7.2m tonnes.