The Brazilian soybean harvest is expected to be even larger than thought, the US Department of Agriculture's Brasilia bureau said, easing some concerns over the oilseed, even if dryness is still seen threatening some other crops.

The bureau lifted by 1m tonnes to 83m tonnes its forecast for the newly-started Brazilian soybean harvest.

The upgrade took the estimate 2m tonnes above the USDA's official forecast, which is up for revision at the end of next week in the monthly Wasde crop report, a key feature of the world agriculture commodities calendar.

And would leave sufficient crop to support 39.0m tonnes of exports in 2012-13 – a rise of 21% year on year, and ensuring that Brazil takes by a margin top position in the soybean shippers' league, traditionally headed by the US, which is expected to sell 36.6m tonnes abroad this time.

The production upgrade reflected promising crop condition, including in the top three producing states of Mato Grosso, Parana and Rio Grande do Sul.

"Crop conditions are rated good across all major producing regions," USDA attaché Jeff Zimmerman said.

'Soybeans in jeopardy'

However, he acknowledged concerns raised by some other commentators, saying that "some isolated areas received less-than-desirable rainfall".

On Wednesday, Gail Martell, at Martell Crop Projections, warned that "an enormous area of the Brazil tropics are experiencing drought", with even Mato Grosso experiencing "exceptionally dry conditions over the past two weeks which is unusual in December, one of the wettest months of the summer season".

"Perhaps 45% of soybeans are in jeopardy from drought, altogether, when other dry states in the tropics are considered."

And Michael Cordonnier, the influential crop scout, cautioned that "regions of north eastern Brazil continue to be in the grip of one of the worst droughts in 40 years.

"Parts of the area received some rainfall during November after months of no rainfall whatsoever, but the rainfall during December was once again much below normal."

'Could be significantly impacted'

However, the north eastern region is a relatively minor soybean producing area, with Bahia, one of the states affected, producing just 4.5% of the national harvest of the oilseed, and Minas Gerais, another drought-hit state, about 4%.

But Bahia is a major cotton-growing region, responsible for some 30% of Brazil's output, while Minas Gerais is the top producing state of arabica coffee beans.

"Bahia is the fourth-largest coffee producing state in Brazil and production is expected to be down by one-third this year," Dr Cordonnier, at Soybean and Corn Advisor, said.

Furthermore, there is a 75% probability that rainfall during the remaining summer will be average or below average, according to Carlos Nobre, a senior official at the Ministry of Science, Technology, and Innovation.

"If his prediction turns out to be accurate, then row crop production in Bahia and northern Minas Gerais could be significantly impacted," Dr Cordonnier said.

• Agricultural Commodities
• Agricultural Markets
• Agricultural Companies
• Agricultural Events