(Add details, quotes from call with analysts)
SAO PAULO, May 7 (Reuters) - Brazilian conglomerate Cosan SA expects cane crushing in its sugar and ethanoldivision in the 2015/16 crop to be closer to the top of aguidance of between 57 and 60 million tonnes that it gaveinvestors.
Cosan's CEO Nelson Gomes said on Thursday that betterweather since the end of the last crop in December is likely toincrease cane yields compared to the 2014/15 season.
"At this moment, we are indicating a crushing volume closerto the guidance's top rather than the middle of it," said Gomesin an earnings call with analysts.
Raizen, the sugar and ethanol joint venture between Cosanand Royal Dutch Shell, processed 57 million tonnes ofcane in the 2014/15 crop.
Cosan expects Raizen to produce more sugar in the new crop, between 4.2 million and 4.4 million tonnes, compared to 4.08million tonnes produced last season, which was hurt by drought.
Ethanol production is forecast between 1.9 and 2.1 billionliters, against 2.06 billion liters in 2014/15.
Gomes said higher volumes of ethanol sales seen in Brazilthis year will lead to a reduction of stocks to normal levelstowards the end of the new crop.
Cosan and other large groups in the sector carried a largerthan normal volume of ethanol stocks between the old and the newcrop, waiting for better prices.
Better yields at the beginning of the new crop and a greaterallocation of cane to ethanol production is pressuring prices ofthe biofuel lower in Brazil.
Brazilian fuels regulator ANP said on Monday hydrous ethanolprices in southeast Brazil averaged 64.4 percent those ofgasoline, the lowest price ratio to gasoline in four years.
Cosan, which include natural gas and fuels distribution,port, railway and land management assets, posted a net loss of43.7 million reais ($13 million) in the first quarter of 2015,compared to a 256.1 million real gain a year ago.
The results were hurt by costs involved in takeover ofBrazil's largest railway operator America Latina Logistica, alsoknown as ALL.
Raizen operates 24 sugar and ethanol mills, making it theworld's largest sugar and ethanol producer.
Brazil's cane belt began crushing the new crop in April andis expected to recover slightly from last year's drought afterrains started to normalize in recent months. (Reporting by Reese Ewing and Marcelo Teixeira; Additionalreporting by Roberto Samora)
