SAO PAULO: Brazilian food supply and statistics agency Conab lowered the 2021/2022 forecast for the country’s soyabean and corn production on Tuesday amid a drought that was mainly affecting commercial crops in the south of the country.

Still, the outlook for the grain season remains positive, with production expected to grow for both commodities in relation to 2021 and exports starting the year strong, according to separate data from Anec, an association representing global grain traders like Cargill and Bunge.

Conab said Brazil is expected to produce 140.5 million tonnes of soyabeans, 1.6% less than in the December forecast, representing a reduction of 2.3 million tonnes.

Conab was more conservative than private consultancies, which last week cut soya output projections by much larger volumes. Conab more aggressively cut Brazil’s total corn output projections for the 2021/2022 season amid dry weather in states like Rio Grande do Sul, where the summer corn crop was severely affected. Conab projected Brazil’s total corn crop at 112.9 million tonnes, 4.2 million tonnes less than in the previous forecast.

Despite Conab’s downward revisions, Brazilian farmers are in for another good season as overall grain output will rise from 2021.

Last year, farmers here produced 137.3 million tonnes of soya, the most since Conab records began. The total corn output was 87 million tonnes last season, the data showed, as the country’s winter corn planted after soyabeans was hit by drought and frosts.

A bigger soya crop than last year’s and earlier product availability due to early planting in top state Mato Grosso will drive exports higher in January, increasing competition with the United States.

According to Anec, Brazilian soyabean exports in January are forecast to reach 4.2 million tonnes, almost 80 times higher than in the same month a year go. Corn exports will go up by almost 500,000 tonnes to 2.6 million tonnes in January, Anec said.