August 27, 2012

Abiove, Brazil's grain industry association, expects the country to produce a record new crop of 81.3 million tonnes, possibly surpassing soy output from US for the first time.

With the increased output, exports of the crop that will be planted starting from September 15 should soar to 37.5 million tonnes, beating the previous 33.8-million-tonne export record from the 2010-11 crop.

A record 2012-13 soy harvest from Brazil would be welcomed by global policymakers since drought in the top-producing US has driven up future prices and stirred up memories of the 2008 food riots.

Spot soy rose 1% in Chicago on Friday (Aug 24), close to an all-time high ahead of final crop estimates from the Pro Farmer tour of the dry US Midwest.

"Brazil will be the largest producer in the world if the US doesn't recover from the adverse climate," Abiove said in a report.

Abiove also raised slightly its export forecast for the 2011-12 crop that finished harvest in May to 30.5 million tonnes from 30 million tonnes in its previous forecast.

Most of the exports from the meagre 66.6-million-tonne crop have already been shipped. Sales abroad slipped to 4.13 million tonnes in July, down 15% from June.

June-September are typically the peak export month for soy, but lower output from Brazil and worries about dwindling supplies after the US drought encouraged earlier sales this year.

Abiove does not explain why it adjusts its estimates, which are based on a survey of associated crushing plants.