In a mirror image of the misery wrought by heavy rains in the UK, wheat growers in Argentina have said yields will be down this year due to disease pressures and waterlogging. Argentina is South America's largest wheat producer; production in the country is comparable to UK levels, though the majority of the wheat grown is often exported.

Due to poor weather; which began as premature El Nino conditions in late summer, wheat yields will be hit and quality will be affected in Argentina's Pampas grain belt. Wheat in the region has been hit by fusarium, and many fields are currently too wet to harvest. With more rain forecast for the Pampas this week, producers are gravely concerned.

On Thursday, the UN Food and Agriculture Association cut its forecasts for global cereal production, estimating 2012 production will fall 2.8 percent below 2011's record levels of 2.282 billion tonnes. Wheat production is forecast to be down worldwide this year, as increases in the US will fail to absorb the impacts of drought on crops in the Black sea and Australia, according to the FAO.

Some analysts in Argentina are predicting the country's crop will contract from a projected 11.1 million tonnes to as low as 9.5 million tonnes, though others maintain other bread basket regions have been less badly affected and will manage to pick up the slack.  On 23rd November, the Argentine government cut the country's output estimate from 11.5 Mt to 11.1 Mt.

Analysts fear the news could spark further price rises at a time when the shocks inflicted during the summer, when fears over the US drought sparked grain rallies, are just beginning to ease. Although wheat output may well be hit by heavy rains which arrived in August, Argentina's soy production remains buoyant; the country is the world's second largest exporter of soy.

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