Argentine soy planting advanced quickly in the last week to cover more than 90 percent of the targeted area, easing fears of a crop shortfall that could keep world food prices high, a key grains exchange said on Thursday.

An unusually wet start to the 2012/13 crop year delayed sowing in Argentina, the world's No. 3 soybean exporter and top supplier of soyoil and soymeal, an animal feed.

But the Buenos Aires Grains Exchange said recent sunny weather firmed topsoils enough to finally allow farmers to drive heavy seeding machines into fields that had until recently been turned to mush by a series of violent rainstorms.

With world food demand growing, consumers are counting on Argentina and neighboring Brazil to help make up for poor harvests in fellow breadbaskets Russia and the United States.

Food prices will remain high in 2013 and low stocks pose the risk of sharp price increases if crops fail, according to the United Nations.

Chicago soy futures are up 2.4 percent this week alone and 16 percent over the past year.

Further price shocks could put basic staples out of reach in poor countries while making it more difficult for crisis-hit developed economies to spur growth by cutting interest rates.

The exchange said 90.8 percent of the 19.7 million hectares estimated for soy this season had been seeded, marking progress of 5.9 percentage points during the week and outpacing last season's planting tempo by 5.2 points.

"Farmers in western Buenos Aires province were able to take advantage of this rain-free period and plant more late-seeded fields, including low-lying areas that had until recently been waterlogged," the exchange's report said.

Last season's soybean take was 40.1 million tonnes after dry weather took a toll on yields. The next harvest will come in March and is projected by the government at 55 million tonnes or higher, depending on the weather.

Farmers, worried about diseases that could strike soy plants in areas that remain waterlogged, are keeping a sharp eye out for fungal outbreaks such as Asian soy rust and frog-eye leaf spot that thrive in soggy conditions.

"Some areas that still cannot be planted with soy will be seeded with corn," the exchange said. "Growers are looking for alternatives to make sure fields are productive."

The weekly crop report said 88.5 percent of the 3.4 million hectares projected for 2012/13 commercial use corn had been planted by Thursday, marking progress of 6.5 points during the week and outpacing the previous season's seeding tempo by 3.9 points.

It was the first time the exchange recorded a substantial advance in 2012/13 corn and soy plantings compared with the 2011/12 season. But the sunshine that has helped advance sowing has also left some areas panting for water.

"Corn in the northern and southern central farm belt as well as north-central Cordoba province and central-east Entre Rios is already in its advanced flowering stages. These areas need water in order to achieve high yields," the report said.

Soybeans in these parts of Argentina could also benefit from fresh showers, it added.

The U.S. Department of Agriculture (USDA) forecasts an Argentina soy crop of 55 million tonnes this season and a corn harvest of 27.5 million tonnes.

(Reporting By Hugh Bronstein)