October 8, 2010

Brazilian corn output may fall 7.5% next year after dry spell

Corn production in Brazil, the world's third-largest producer, may fall as much as 7.5% next year as below-average rainfall pares yields and the planted area.

Farmers will harvest between 51.8 million tonnes and 52.4 million tonnes, down from 56 million tonnes this year, the Brazilian Agriculture Ministry's crop-forecasting agency (Conab) said.

Corn farmers may trim the planted area by as much as 2.1% to between 12.7 million and 12.8 million hectares (31.4 million and 31.6 million acres), Conab said. A dry spell in Brazil's Center-South and irregular rains in the South due to the La Nina weather pattern may pare yields and make the soil too dry to plant, according to the report.

The government has 5.5 million tonnes of corn in inventories, enough to meet domestic consumption needs, he said. Exports of the commodity may fall to 8 million tonnes from 9.5 million tonnes this year.

Corn for December delivery rose US$5.25, or 1.1 %, to US$4.938 a bushel on CBOT. The price has climbed 19% this year.

Soy output in Brazil, the world's largest grower after the US, will total between 67.6 million and 68.9 million tonnes next year, Conab said. That compares with production of 68.7 million tonnes this year.