February 6, 2009

Brazil may cut this year's corn and soy output forecasts for the third time as it assesses damage from a drought in recent months, Agriculture Minister Reinhold Stephanes said.

The government lowered its corn estimate to 50.3 million tonnes on Thursday (Feb 5) for the current crop year, down from 52.3 million tonnes projected on January 8 and from 58.7 million tonnes produced last year.

Soy forecast fell to 57.2 million tones from 57.8 million tonnes last month and 60 million tonnes harvested in 2008.

Brazil and Argentina, the biggest exporters of soy and corn after the US, faced damaging drought in major producing regions in recent months just as plants needed water to flower and mature.

Agriculture Ministry's crop-forecasting agency logistics director, Silvio Porto said rainfall in southern agricultural regions will be 40 percent below historical averages for the next three months.

Brazil is the world's second-biggest soy producer and third-largest for corn.