Brazil on Tuesday raised its forecast for the size of this year's soyabean crop after seeing a larger total planted area than in previous months, but warned that drought conditions which have raised the specter of production shortfalls have not been fully accounted for.
Government crop agency Conab forecast 2011/12 soya production at 71.75 million tonnes, up from the 71.29 million tonnes it estimated in December. It said it would only be able to factor in the full effects of a harsh dry spell hitting grains regions in the south of the country in its next field survey. The crop agency's estimate of the total soya area planted rose to 24.6 million hectares from 24.3 million hectares in its prior survey.
Conab also cut its corn forecast to 59.2 million tonnes from 60.3 million tonnes in its December estimate, but again said the effects of recent dryness were not accounted for in its number, which would make further reductions likely. The biggest concern for corn and soya is in Rio Grande do Sul state which has had hardly any rain in its grain regions for weeks though moderate showers are forecast to reach the area this week. The state is the country's third biggest for soya and fifth for corn. Fortunately, the country's top soya state, Mato Grosso, has escaped drought problems and instead will now need weather to turn drier to help harvesting starting now.
The agency's survey is based on field research between December 5 and 21. The weather since then has continued critically dry in the far south of the country and agricultural entities in individual states have begun cutting their own crop estimates. Weeks of almost unbroken dry weather in the south of Brazil, the world's No 2 soya producer, as well as in No 3-ranked producer Argentina, has helped to drive a rally in grains futures contracts since November.
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