January 10, 2012

The unusually dry weather in the southern part of Brazil limits productivity, anticipating its 2011-12 soy and corn crops to be smaller than previously expected, consultancy Celeres said Monday (Jan 9).

Celeres now expects Brazil's 2011-12 soy production at 74.44 million tonnes, down from a December forecast of 75.61 million tonnes. The revised estimate would make the current soy crop 0.6% smaller than last year's, nixing initial hopes for a record harvest.

"Weather problems caused by the La Nina phenomenon brought a severe dry spell during the month of December, mainly in the southern region, compromising the productive potential of plants," Celeres said.

The firm added that planting of the 2011-12 soy crop is 100% complete, with 57% of fields blossoming. In parts of northern Mato Grosso state, Brazil's top soy grower, some "timid" harvesting has begun.

Brazil's summer corn crop is suffering from similar weather concerns.

Celeres cut its outlook for corn production to 36.85 million tonnes from 38.61 million tonnes expected last month. The forecast reflects a 12% production increase from last year's summer corn crop, but Celeres now expects yield-per-hectare to fall 2.2% from 2010-11.

"The factor that most concerns producers is that, with most cornfields in the blossoming phase, the dry weather in the southern region could further compromise plants' development," Celeres said. While dry conditions are expected to persist in southern Brazil, other regions should continue to see healthy rainfall. Celeres added that expectations remain positive for Brazil's subsequent winter corn crop.

Brazil is the world's No. two producer of soy and is expected this year to export roughly as much of the oilseed as the US, the top grower. Brazil is also the No. three corn grower, though the South American country keeps the bulk of that grain at home for use as animal feed.