Dry weather has put Brazil's soybean crop, the world's second biggest, "in jeopardy", Oil World warned, amid growing fears among farmers of the return of the disruptive La Nina weather pattern.

The influential analysis group warned that the "unfavourably dry" start to Brazil's soybean sowing season meant "the threat of declining yields has increased".

"The conditions for planting and early germination continued to be very poor" last week.

"It is now considered likely that virtually nothing will be planted until the end of September," as compared with the mid-month start that grower in the major production states of Mato Grosso, Mato Grosso do Sul and Goias.

The late sowing season meant "crop prospects for early 2012 are in jeopardy", Oil World said, adding that "there is a risk of an even more severe decline in production" than the 2.0m tonnes, to 73.3m tonnes, that it has forecast in Brazil's soybean output next year.

'Increased dry weather'

The warning comes amid growing concerns that the La Nina weather pattern may be returning, after 2010-11 event termed by the World Meteorological Organization as the second-most extreme since records began in 1876.

Brazil-based crop consultant Kory Melby said that there was "more and more talk" in the country of La Nina, which is linked to weather extremes in neighbouring Argentina too.

In New York's soft commodities market, trader Jurgen Bauer flagged talk "that La Nina could lead to increased dry weather in Brazil" in the context of sugar production.

And Credit Suisse on Monday highlighted the La Nina risk in research forecasting resilient crop prices and recommending shares in fertilizer groups such as CF Industries and Agrium as well as in farm equipment maker Deere & Co and sugar-to-oilseeds processor Bunge.

"The weather experts seem to agree that this La Nina is unlikely to be anywhere near as severe as the last episode but nevertheless it seems that perfect growing conditions are not on the cards for the next agricultural season," the bank said.

Palm oil prices to soar? 

La Nina alarm bells have run in Asia too, where crop output also has a history of damage from La Nina.

Dorab Mistry, head of vegetable oil trading house Godrej, on Monday said that palm oil prices could hit 4,000 ringgit a tonne by the second quarter of next year on a return of La Nina, linked to heavy rains in top producing states Indonesia and Malaysia, hampering harvesting as well as depressing pollination rates.

And earlier on Tuesday, Standard Chartered analyst Abah Ofon warned that the "looming risk of a La Nina weather pattern developing in the southern hemisphere late this year could adversely affect palm oil harvests and soybean output".

Already, weather upsets have boosted prospects for palm oil demand, in destroying some Pakistani cotton plantings and lowering its output of cottonseed oil by 5-10%, and leaving the country facing a rise of 3.6% to 2m tonnes in edible oil imports next year, on industry estimates.

Mr Ofon forecast palm oil futures, which closed at 2,948 ringgit a tonne in Kuala Lumpur, up 1.5% on the day, rising to average 3,400 ringgit a tonne in the first quarter of 2012, and 3,600 ringgit a tonne in the second quarter.