Food prices have surged this year due to the worst U.S. drought in decades combined with dry crop weather in Russia and Australia. Poor yields from these countries have put the supply onus on South American breadbaskets Argentina and Brazil.

Soy is Argentina main agricultural export. The country is also the top world supplier of derivatives such as soy meal cattle feed and soy oil, used in cooking and to make biofuels.

The Buenos Aires Grains Exchange estimates 2012/13 soy area at 19.7 million hectares (48.7 million acres), up 4.5 percent from a 2011/12 season hobbled by a December-January dry spell that parched soy and corn plants. Problems posed by too much rain are less debilitating than those posed by drought as excess moisture allows for wider planting area, helping to offset losses caused by flooding.

The U.S. Department of Agriculture forecasts Argentine soy production in the upcoming season at 55 million tonnes, well above the 41 million tonnes collected in 2011/12.The Argentine government says 2012/13 soy output could smash previous records and hit 58 million tonnes.

Till oct.24th, Argentine farmers had sown 37 percent of the 3.4 million hectares expected to be dedicated to commercial-use corn this year, according to the exchange. Corn planting advanced 5 percentage points over the previous week, but it trails last season’s rhythm by 18 percentage points.

The USDA sees 28 million tonnes of Argentine 2012/13 corn production and 11.5 million tonnes of wheat. The exchange said that 4 percent of Argentina’s 2012/13 wheat crop has been harvested. But the exchange said it kept its wheat crop estimate unchanged at 10.1 million tonnes, thanks to good growing conditions in the southeast and southwest Buenos Aires province, the country’s biggest wheat-growing region.