October 9, 2008

The government said soy output in Brazil, the world's biggest producer after the US, will rise to a record next year as growers boost planting and corn production will drop.

Conab, the Agriculture Ministry's forecasting agency said soy output in Brazil will climb to 60.1 million to 61.3 million tonnes in 2009, up from a record of 60 million this year. Corn output will drop 55 to 56 million tonnes, from a record of 58.6 million tonnes this year.

Brazilian farmers increased soy planting even after prices dropped and production costs rose, on expectations the commodity may rebound. Growers have also favored soy over corn because a bigger market for oilseed makes it easier to sell.

Celeres, an Uberlandia, Brazil-based crop forecaster said the increase may be less than expected should farmers continue to have difficulty obtaining credit and prices fall further, with uncertainties, it has also led growers to slow advance sales of the coming crop.

In a Monday, 6 October 2008 report, Celeres said the uncertain climate of future prices has slowed down the pace of commercialization in the Brazilian market, with cuts in its forecast for next year's soy crop to 61.7 million from 63.9 million tonnes in September.

Growers have committed to sell 17 percent of the coming crop, compared with 22 percent on average for the same period over the past five years.

Soy futures have dropped 23 this year. Soy for November delivery rose 4 cents, or 0.4 percent, to $9.26 a bushel yesterday on the Chicago Board of Trade.