February 10, 2012

As drought over the southern grain belt took its toll on yields, Brazil's government pared back its forecast for soy production on Thursday (Feb 9), but it raised the outlook for corn, expecting winter planting to jump in the coming weeks.

The fifth forecast of the 2011/2012 grain crop by the Agriculture Ministry's supply agency Conab comes after drought over southern Brazil and Argentina raised fears of a sharp drop in output. Combined, the two nations produce more soys than the US, the largest single producer.

Conab said the soy crop would fall to 69.23 million tonnes from the 71.75 million tonnes it estimated in January, after taking into account the effects of the drought that has hurt yields in Brazil's southern grain belt.

But it said the country's total corn crop would rise, however, to 60.83 million tonnes due to an expected surge in winter corn crop planting in the coming weeks. The summer crop was hurt by the same drought withering the soy crop but winter corn is expected to reach 25.79 million tonnes, up from January's forecast of 21.29 million tonnes.

Brazil has moved up the ranking of world corn exporters to the No. three slot, shipping around 10 million tonnes a year.