SAO PAULO- AgRural, a Brazilian agribusiness consultancy, on Tuesday announced a new forecast reduction for the country's second corn crop because of a severe drought, adding that yields are expected to touch a five-year low this season.
AgRural said in a statement that Brazilian farmers in the center south are now expected to produce 60 million tonnes of second corn, a 5 million-tonne reduction from a forecast in May and a 17 million-tonne reduction from AgRural's initial projection for this year's second corn crop.
Regarding yields, AgRural expects farmers will harvest 77.5 60-kg bags per hectare, the lowest for the Center South since 2016.
"Expected average yields fell across all producing states," AgRural said. "For most areas ... rainfall came too late."
Separately, Arlan Suderman, chief commodities economist for StoneX Group, also lowered Brazil's total corn production forecast to 89.68 million tonnes on Tuesday, down from the 100.25 million tonnes seen in May.
Brazil's second corn crop represents about three-fourths of production in the year, but this season the drought meant output will be a lot lower than initially expected. The situation affected Brazil's potential exports of the cereal and increased domestic meal prices, as corn is a key ingredient to make livestock feed.
Last week, at least two Brazilian government agencies warned of droughts across the country as the nation faces its worst dry spell in 91 years, hurting grain cultivation and livestock and raising the risk of forest fires.
Mato Grosso, which is Brazil's largest grain state, had some degree of corn crop failure due to dry weather, though the situation there was not as bad as in other states as it received some rains in April and May, AgRural said.
(Reporting by Ana Mano; editing by Jonathan Oatis) ((ana.mano@thomsonreuters.com; Tel: +55-11-5644-7704; Mob: +55-119-4470-4529; Reuters Messaging: ana.mano.thomsonreuters.com@reuters.net))
