SAO PAULO, Brazil (DTN) -- Agroconsult, one of Brazil's leading farm consultants, slashed its 2011/12 corn forecast Thursday by nearly four million metric tons (mmt) and cut its soybean forecast by more than 1.5 mmt on the drought that is castigating crops across the southern grain belt.

Brazil's summer corn output will total 36.5 mmt, still 2% higher than last year's crop of 35.9 mmt -- planting is up 9% -- but 9% lower than the December estimate of 40.3 mmt, said the consultancy.

Meanwhile, soybean output is now seen at 73.5 mmt, down 2% on last year's crop of 75.3 mmt and also 2% lower than the December forecast of 75.2 mmt.

According to Agroconsult Director Andre Pessoa, the severity of the drought is far from uniform and therefore the true extent of the damage will only become clear once harvesting is under way. But recent field surveys showed corn in a dire state in the center and north of Rio Grande do Sul, traditionally the No. 2 summer corn state, he said.

"Farmers have lost 40% to 50% of their corn in the worst-hit areas. Those losses are irreversible," Pessoa explained.

Rain is forecast for Thursday in the south of Brazil, which will help revive soybeans in the southernmost state of Rio Grande do Sul, although it has come too late for many plantations in the top-producing western reaches of Parana state.

That's because soybeans are planted much earlier there and the drought hit the crop during later key development stages.

Soybean plants were stunted by the drought in Parana and that has fatally affected yield potential, said Pessoa.

Agroconsult cut its Parana soybean crop forecast to 13.2 mmt from 14.3 mmt and its Rio Grande do Sul number to 10.0 mmt from 10.4 mmt.

While the drought has caused distress across the southern farming belt, Pessoa pointed out that dry weather such as was seen during the last two months is normal during years in which the La Nina weather phenomenon is active.

He said last year, when La Nina was active but rains were plentiful, was an exception for the south.

Pessoa was speaking at the launch of the 2012 edition of Agroconsult's Rally da Safra -- a two-month crop tour of Brazil's principle soybean and corn-producing regions.

Alastair Stewart can be reached at alastair.stewart@telventdtn.com or followed on Twitter @astewartbrazil

(SK/ES)

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