February 10, 2010

Brazil soy estimates increase on rains

Brazil has boosted its production estimate for soy this year and said it may increase the forecast again as above average rainfall improves yields.

Soy farmers will produce 66.7 million tonnes this year, up from a January 7 estimate of as much as 65.2 million tonnes, USDA said, adding that output will rise from 57.2 million tonnes last year.

Rain is expected to continue in the Centre-South region in the next three months, aiding crops, Conab said.

Soy prices are down 4.4% so far this year after farmers in the US, the world's largest producer and exporter, harvested a record crop last year. Soy for March delivery rose 0.6% to US$9.35 a bushel on the CBOT.

Conab also raised its outlook for corn output this year to 51.4 million tonnes, up from a January forecast of 50.5 million tonnes. Production was 51 million tonnes last year. Brazil is the third-largest corn producer, trailing the US and China.

According to reports, fertiliser sales may rise as much as 5% this year on the record soy crop. Fungicide sales may also increase as humidity raises the risk of crop diseases, he said, declining to provide a specific forecast.