July 6, 2012

Brazil ups corn crop estimate by 2.5%, maintains soy

Brazil's corn harvest estimate has been increased by 2.5% to a record 69.48 million tonnes on Thursday (July 5), while retaining its outlook of the drought-stricken soy crop.

The estimate for the corn crop would represent a leap of more than 20% from the previous season when output reached 57.4 million tonnes, and is up from a June estimate of 67.8 million tonnes, government crop supply agency Conab said in its 10th revised estimate for 2011-12 grain output.

Despite the improved outlook for Brazilian corn, Chicago corn futures contracts jumped to a contract high on Thursday (July 5) while soy rallied to their highest since 2008 as a US heat wave continued to scorch crops.

Conab attributed the rise in expected corn output to good weather conditions observed in the development phase of the winter crop, which has just begun harvesting, and also to expanded planting. The total area planted with corn for the winter crop, the second of two annual harvests, registered a sharp increase of 23%.

The agency maintained its estimate for the drought-hit 2011-12 soy crop in the world's No. two producer at 66.37 million tonnes, 12% less than the 75.3 million tonnes achieved in the previous season due to the harsh drought.

The drought, which extended into No. three soy producer Argentina, has been blamed on the now dissipated La Nina weather anomaly, which brings dryness to those areas.

Separately, Conab lowered its wheat crop estimate to 5.03 million tonnes, from 5.10 million tonnes in the June outlook. Conab's cotton lint estimate fell almost 4% to 1.90 million tonnes, down from 1.97 million tonnes seen in June.