May 1, 2012

Due to drought, Brazil's 2011-12 soy crop is expected to produce 66.2 million tonnes, half a million less than their March view of 66.7 million tonnes, according to crop forecasters AgRural.

A lack of rain this season over the South American grain crop in Brazil, Argentina and Paraguay, which together produce more than half the world's soy trade, has raised concerns of falling stocks of the world's most important source of protein.

The forecast would mark a 12% drop from last year's 75.3 million-tonne harvest, according to AgRural figures.

Yields have been falling consistently in all of Brazil's large growing states with the exception of the No.four producer Goias that got excellent rains this year. Sharp declines were registered in the states of Parana and Rio Grande do Sul, the No.two and No.three soy growers.

The drought that began in November and lasted around three months has been particularly acute in those southern states. Top soy state Mato Grosso escaped the drought and produced a bumper crop, though not enough to compensate for losses elsewhere.