Queenstown businesses are being warned to brace themselves for potential flooding as more heavy rain is predicted to pound the South Island over the next two days.

The Southland region has been drenched since the weekend, causing the worst flooding in 10 years.

It knocked out phone lines to Te Anau, prompted the evacuation of trampers, and caused the closure of numerous roads and schools.

Steadily receding rivers had dropped back below flood trigger levels by noon today.

However, Environment Southland resumed its flood watch this afternoon as a band of steady rain moved over the headwaters of Lakes Manapouri and Te Anau and toward the Mataura River.

The MetService is predicting the band to move further east, dumping a further 100-150mm of rain on catchment areas from tomorrow until Friday morning.

Environment Southland's director of environmental management, Warren Tuckey, said the rain would have a "significant impact" on the region's already swollen rivers.

"We will resume flood warnings if the rainfall and river conditions reach our preset trigger levels, bearing in mind that the catchments are already saturated," Mr Tuckey said.

A flood warning is already in place in Queenstown, where heavy rain has caused Lake Wakatipu to swell to its first warning level.

The lake is predicted to rise further tomorrow with the forecast rain.

Queenstown Lakes District Council has contacted businesses and farmers in low-lying areas and advised them to prepare for a possible flood.

"There is a likelihood that low-level flooding will occur on roads and reserves within the next one to two days," Mayor Clive Geddes said.

"We will know more tomorrow but if we reach the position that we feel we need to take some more significant measures, such as sandbagging, then we will give retailers plenty of lead-in time."

Meanwhile, ships sailing through the Foveaux Strait are at risk from hundreds of plastic-wrapped bales of stock feed which have floated off from waterlogged Southland farms, down rivers and into the sea.

Harbourmaster Kevin O'Sullivan said he had initiated a notice to mariners warning of hundreds of the partially submerged bales floating offshore.

He had been alerted to the hazard by Meri Leask, of Bluff Fishermen's Radio, who had received several calls from fishing boats and the Stewart Island ferry.

"If a boat is running at 20 knots and hits one of these bales, it would come to a shuddering halt," Mr O'Sullivan said. Logs and other flood-borne debris were another hazard that posed a risk to ships.

The bales were gradually becoming waterlogged and sinking as water seeped through the plastic wrap and they would eventually sink, but in the meantime they would float partially submerged and could be difficult to spot.

While hundreds of bales had been washed out to sea, thousands more had piled up against fences in the lower reaches of all the region's rivers, causing extensive damage.

Civil defence group controller Neil Cruickshank said it could take weeks to gather a full picture of the losses, including damage to public assets like stopbanks, roads and bridges, and private property.

Farmers and others whose property had been affected by the floods could contact Environment Southland to describe any damage.

This, together with reports from local authorities and other agencies, would help to establish the extent of the problem and assess the level of recovery support needed.

Meanwhile, heavy rain in Northland had not managed to drag the region out of its months-long drought, with soil moisture levels in the region still low.