Normal to abundant rains resumed at the end of August in the key wheat producing states of Paraná and Rio Grande do Sul, which account for nearly 90 per cent of domestic wheat output. Some main producing areas in these states have suffered from a dry spell with a consequent adverse effect on crop development. Harvesting has started in some parts and early forecasts tentatively point to a near record wheat output in 2002 of 3.9 million tonnes but production is likely to be smaller in view of serious frosts around 10 September. The increase in production is largely a result of the government’s recent incentive programme for farmers, motivated in part by the likelihood of higher wheat import prices (over 7 million tonnes of wheat are annually imported). Harvesting of the second season maize crop (“zafrihna”) in the southern states has been completed and a bumper crop of some 6 million tonnes has been collected. This is lower than earlier forecast as a result of adverse weather in the largest producing state of Paraná. Adverse weather also affected the second season crops in Matto Grosso do Sul, Sao Paulo, Matto Grosso and Goias. Total maize output for the year is provisionally estimated at 35.7 million tonnes which compares to the past 5-year average of 34.5 million tonnes.