SAO PAULO, Aug 24 (Reuters) - After a dry August, El Nino rains could jump-start a bumper grain crop in Brazil, the world's No. 2 soybean producer, and ease fears of a global food shortage.
After two years of irregular rainfall over Brazil's grain belt during the La Nina ocean/climate phenomenon, warmer surface waters off the coast of Peru associated with El Nino have raised hopes of steadier, more abundant showers starting in September.
Analysts expect an unprecedented soybean comeback in Brazil this year, with weather forecasts, prices and a favorable exchange rate encouraging bets on soy after drought left a disappointing 65-million-tonne crop last season. (Full Story)
On the low side, Minas Gerais-based analyst Celeres expects Brazil's overall soy crop to produce a record 78.1 million tonnes, while Safras e Mercado foresees an 82.3-million-tonne crop. The government starts official forecasts in October.
"An El Nino year means above-average rainfall in the center and south of Brazil," said Flavio Franca Jr, chief soy analyst at Safras. "We are expecting the harvest to be much better than last year, which is probable because the climate was so awful."
A record 2012/2013 soybean harvest from Brazil, especially an early one, would be welcomed by global policymakers since drought in the top-producing United States has driven up future prices Sc1 and stirred up memories of the 2008 food riots.
Though planting soy before Sept. 15 is against the law in Brazil, where the government enforces measures to contain the spread of Asian rust fungus, farmers try to plant corn in August, rain permitting.
"We've had farmers calling to say they are planting corn. With rains possibly returning in September, they are planting the first corn crop to take advantage of rains that will be constant until November," said weather forecaster Olivia Nunes of Sao Paulo-based Somar Meteorologia.
The organization of farming cooperatives Ocepar in No. 2 soybean producing state Parana estimates planting will start on S e pt. 21 for 40 percent of farmland, manager Flavio Turra said.
RISKS AND REWARDS
Producers in Parana that planted soy early last year suffered most from the drought later in the season, but higher prices and the likely rains from El Nino help to justify the risk this year, Ocepar's Turra said.
Farmers in neighboring Argentina, to the south, have already seen unusually early rain this year. With the pampas farmland on track for t h e wettest August on record, they also plan to start planting corn, and perhaps soy, earlier than expected after drought parched crops last year there.(Full Story)
But farmers in Brazil still have no hard evidence of rain. A dry August in Brazil's grain belt has some doubting this year will be different from the past two, when soybean planting did not start until at least late October.
"We are still in a transition between El Nino and La Nina," said Marcelo Garrido, an economist at Parana's state agriculture agency Deral. "Parana is in a longer drought period. It still hasn't rained in August."
A grains trader in Mato Grosso confirmed a dry August in center-west Brazil, where grain planting starts before moving south. But that isn't stopping farmers from forward selling the crop faster than ever before, he said. (Full Story)
Brazil collected a record, high-yielding crop in 2010 even after La Nina climate delayed planting.
Harvest was put off from December until February that year, slowing delivery to ports. Delays could be a bigger concern in a year Brazil's soy exports may be needed to ward off a food shortage abroad.
An early soy harvest in Brazil is also important for farmers hoping to sow a second corn crop. They can start planting corn as early as January in the same fields from which they harvest their soybeans.
Brazil brought in a record 72.8-million-tonne corn crop this year thanks to a strong second crop, and the United States has been importing Brazilian corn, as it faces an expected shortage.
