"The climate framework is favourable in all producing regions of the country," Conab said in its report, adding that dry conditions in Rio Grande do Sul had normalised. Brazil has been the world's No 2 soyabean grower in recent years but will probably surpass the drought-stricken United States in production of the oilseed this season with an expected rebound from a disappointing 66.4 million tonne crop in 2011/12.
However, the crop's potential could be limited as parts of No 2 soya state Parana and No 3 state Rio Grande do Sul received up to 60 percent less monthly rainfall in November than they did in previous years, delaying planting. Analysts at FCStone do Brasil reduced their forecast for the crop by 2 percent to 80.01 million tonnes on Tuesday, citing lower yield expectations.
But Conab left its forecast for soya field productivity nearly unchanged at 3.03 tonnes per hectare compared with 3.08 tonnes per hectare in November. Rains in the past few days have brought relief to the south and top soya growing state Mato Grosso has enjoyed above-average rainfall. Conab also said it expects a strong corn crop of 71.9 million tonnes, compared with the outlook of 71.6 million to 72.9 million tonnes in November, even though farmers are favouring soyabeans over corn planting during the summer crop.
"Corn is losing space to soya in all states where there is a competition for area," Conab's report said. Area planted with soya is expected to increase by 8.8 percent from last season while corn area should fall by 2.7 percent. Both the corn and soyabean forecasts are slightly above the median estimate of analysts in a Reuters poll, which expect a 70 million tonne corn crop and an 81 million tonne soyabean crop.
The Reuters poll forecasts are the same as the US Agriculture Department's estimates. Conab raised its forecast for exports from the record corn crop that was mostly harvested in May and is still leaving Brazil's ports to 20.5 million tonnes from 19 million tonnes in November, as Brazil helps refill low global grain stocks.
Brazil will likely export 15 million tonnes of corn and 36.4 million tonnes of soya from the new crop, though analysts have warned that the country's roads and ports are not prepared for such massive volumes. That could lead to delays in shipments next year.. Brazil will likely produce a cotton lint crop of 1.5 million tonnes, down from 1.9 million tonnes last season, Conab said.
Wheat production, which was hurt by strong rains in southern Brazil during harvest period, was forecast to fall to 4.46 million tonnes, down from last year's 5.7 million tonne crop. January soyabeans rose 0.24 percent in Chicago to $14.82 a bushel on expectations of a jump in Chinese demand and concerns about supplies from Argentina while March corn fell 0.3 percent to $7.55 a bushel.