UPDATE 1-Brazil industry grows less than forecast in April

* Output rises for fourth straight month in April

* Rate futures drop on lower-than-estimated growth (Recasts, adds main industry segments, rate futures)

SAO PAULO, June 1 (Reuters) - Industrial output in Brazil climbed for a fourth month in April, but the expansion came in lower than expected, signaling a weak recovery in Latin America's largest economy.

Production rose 1.1 percent in April from March BRIO=ECI, after growing a revised 0.9 percent the previous month, statistics agency IBGE said on Monday. A Reuters poll with 20 analysts forecast a median increase of 1.6 percent in the indicator.

Forecasts ranged from a 0.2 percent decline in production to a 2 percent expansion.

Yields on interest rate futures contracts <0#DIJ:> edged lower after the release of the output figures, on expectations the central bank will keep cutting borrowing costs to stoke growth.

Yields on the shortest-term rate contract, the July 2009 DIJN9, fell to 9.66 percent from 9.73 percent on Friday.

Sixteen of the 27 industrial sectors tracked by the IBGE expanded in April from March, led by a 3.3 percent increase in automobile production after months of strong declines when companies idled factories to reduce inventory.

Output of basic steel rose 5.1 percent, while rubber and plastics production increased 6.7 percent month-on-month.

When compared with April 2008, industrial production BRIOY=ECI plunged 14.8 percent, the IBGE said.

It was expected to have dropped 14.5 percent on a year-on-year basis, according to the median estimate of the economists in the survey. Forecasts for the slump in output ranged from 14 percent to 15.8 percent.

For more details on the IBGE's industrial output report, see: here (Reporting by Elzio Barreto, Editing by Chizu Nomiyama)