BUENOS AIRES, April 3 (Reuters) - Argentina's biggest grains exchange slashed its forecast for 2011/12 soy production to 43.1 million tonnes on Tuesday as the extent of drought damage becomes clearer, especially in northern provinces.
Rosario grains exchange said acute damage to crops in Tucuman, Salta, Chaco and Santiago del Estero had led it to cut its previous forecast for production of 44.5 million tonnes.
"The reductions as a result of dryness are very significant in those areas," the exchange said in a report.
Argentina, the world's No. 3 soy supplier and the top exporter of soybean oil and meal, was hit by dry weather during sensitive crop development stages in December and January.
While rains have brought relief to many growing areas since then, damage in the worst-hit regions has dimmed overall harvest prospects, Rosario's report said, estimating the average yield at 2.3 tonnes per hectare.
It also lowered its outlook for 2011/12 corn production a shade to 19.7 million tonnes from 19.8 million tonnes previously. Average yields were estimated at 5.5 tonnes per hectare.
Argentina is the world's second-biggest corn provider after the United States and farmers had initially hoped for a record crop this season until the dry spell struck.
