Brazil's coffee crop may beat the 48.48m-bag record this year, the country's crop supply agency said in a report which also raised forecasts for the newly-begun soybean harvest.

The world's biggest coffee grower will produce 45.89m-48.66m bags of beans in 2010-11, an increase of up to 23% on this year's harvest and potentially beating the record set eight years before, Conab said.

The rise is down in part to coffee's biennial cycle, which sees periods of lower production, such as the 2009-10 year which ends in March, followed by "on" years of greater output.

Rain impact

However, it also assumes a relatively benign impact from Brazil's heavy rains in the second half of 2009 which, while on the plus side encouraging foliage, also stimulated unusual flowering patterns which have worried some growers.

"Interestingly the upper level of [Conab's] 2010/11 figure is comparable or even higher than some trade estimates, which is certainly a departure from the usual underscoring," Sucden Financial analyst Ralph Hawes said.

Conab is renowned for making low initial crop estimates. Indeed, it on Thursday lifted its estimate for the 2009-10 crop from 39.0m tonnes to 39.47m tonnes.

Rain effect 

The agency also raised its forecast for the 2009-10 soybean crop in Brazil - the second-ranked producer after America - by 600,000 tonnes to 65.16m tonnes, also a record.

And it pegged the corn harvest at 50.49m tonnes, 350,000 tonnes higher than its previous estimate, if below last year's record 51m-tonne crop.

Higher soybean prices have encouraged farmers to switch from corn to soybeans, a trend highlighted on Wednesday by Monsanto in noting a decline in seed sales.

Harvest progress 

The revisions had been foreseen by analysts, and follow encouraging reports from the early harvest.

"Northern Brazil harvest yields are large," broker US Commodities said, adding that record production of both soybeans and corn was "very possible".

"The Brazil crops continue to grow."

At GrainAnalyst.com, analyst Victor Lespinasse said it was likely that Washington would follow Conab's lead and raise its forecasts for Brazil's soybean harvest in crop reports due on January 12.

Soybeans for March closed down 3.1% at $10.26 a bushel in Chicago on a weak day for crop prices, with March corn ending down 1.0% at $4.17 ½ a bushel.

In New York, March arabica beans, Brazil's main coffee crop, ended up 0.30 cents at 141.65 cents a pound.