The Asian rust soybean fungus has now been identified in 128 municipalities across Brazil's agricultural belt, up from 88 two weeks ago, government pathologists said Wednesday, according to a Dow Jones report.

The fungus, which can cut yields by 80 percent, has appeared early in the current 2004-05 crop cycle, increasing the risk of losses, and reports of its appearance are expected to multiply as Brazil's record crop reaches the later stages of development.

"A lot of cases were identified during the vegetative development stage of soy," said Rafael Soares, crop pathologist at the Agriculture Ministry's research agency, Embrapa.

Last year, Embrapa estimated rust caused losses of 4.5 million metric tons out of a crop of 50 million tons. Of the 128 registered cases of the fungus this season, only 64 are in commercial crops.

Some 71 of the total cases are in the southern state of Parana, Brazil's second largest soybean producer. In contrast, there have been only 18 cases reported in the No. 1 state of Mato Grosso, an area ravaged by the disease last year.

In Mato Grosso, delays in planting and a lack of rain may have been responsible for the limited number of cases, said Embrapa's Claudine Seixas.

At the moment, there have been no cases reported in the newer soy states of Tocantins and Bahia, which are isolated from the main soy belt in the north and northeast of the country and have also suffered from a lack of rain.