Yields from the early soybean harvest in Brazil's top growing state are "as good as last year", with those further east expected to prove "significantly better", helped by rains which have also boosted corn production prospects.

US Department of Agriculture staff said a field trip to Mato Grosso, which produced nearly 30% of the Brazilian soybean harvest last year, and Bahia had revealed "very good" crop condition.

Bahia, while only responsible for some 5% of Brazilian output, was described as a "key swing state".

"Harvesting of the early soybean varieties has started in Mato Grosso, and soybean yields are reported by contacts in the region to be as good as last year," the USDA said, seeing the rains delaying harvesting as beneficial for later-maturing crops.

"In Bahia contacts are expecting soybean yields to be significantly better compared to the drought induced lower yields of last year."

'Yield prospects improved'

The comments came as the USDA raised by 1.0m tonnes, to a record 83.5m tonnes, its forecast for Brazilian soybean output in 2012-13, and by 1.5m tonnes to 72.5m tonnes its estimate for the corn harvest.

"Yield prospects for Brazil's first season corn have improved due to good grain-fill conditions in the key states of Paraná and Goiás," the USDA said.

While the rain delays to the soybean harvest in Mato Grosso are having some impact in slowing plantings of the follow-on safrinha corn crop, "farmers are able to harvest the soybeans and plant the safrinha corn".

'Blight and smut'

The comments contrast with a more downbeat assessment of crops in Argentina, whose corn and soybean crops the USDA  both downgraded by 1.0m tonnes.

In soybeans, "a lack of moisture in some areas and the limited and widely dispersed rains, seen within the last 15 days have caused concern for the crop," the USDA said.

In corn, "some of the Argentine crop now at grain-fill stage has base leaves turning yellow due to both moisture-deficit and to corn mite infestation, resulting in potential yield loss.

"Farmers have been battling armyworms and stem borers as well as blight and smut in areas that earlier had excess moisture but now have low surface moisture."