The Selecao lost friendlies to Mexico and Argentina in June and now sit in 11th place while England jumps to fourth after reaching the quarterfinals at Euro 2012.
Brazil has dropped out of the FIFA rankings top 10 for the first time since the system's inception in 1992.
The Selecao have fallen five places to 11th after losing their last two games to Mexico and a Lionel Messi inspired-Argentina, which remains seventh.
England has moved up to fourth in the world despite the quarterfinal exit at Euro 2012 while Italy, which beat the Three Lions in the quarterfinals and reached the final has jumped up six places into sixth.
Spain retsain top spot with Germany rising to second place at the expense of Uruguay.
Portugal has also jumped into the top five after reaching the semifinals in Ukraine and Poland and the Czech Republic has risen nine places to break into the top 20 after making the quarterfinals before being knocked out by the Seleccao.
Mexico and the USA remain the two highest ranked teams in CONCACAF, with Mexico holding firm at 19 and the USA dropping eight spots to 36.
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