Normal to abundant rains in June benefited the development of the 1997 wheat crop in the main producing regions of Southern Brazil. Harvesting is about to start and output is provisionally forecast at 2.9 million tons, which compares to 3.3 million tons in 1996. The decline is mostly due to the combination of decreased plantings, caused by unattractive prices to producers, and dry weather at planting in the key producing states of Parana and Rio Grande do Sul, which together account for about 94 percent of total domestic production. Production in the former state is anticipated to decline from 2 million tons to 1.7 million tons while that in Rio Grande do Sul should drop to 780 000 tons from a high 1 million tons in 1996. Fieldwork has been initiated in the main producing areas for planting of the 1997/98 maize and paddy crops to be started from August and October respectively. Should forecasts of above-normal rains towards the end of the year, attributed to �El Ni�o� effect materialize, reduction of plantings is likely to occur.