Farmdoc has an article that looks at the discrepancy between USDA  and CONAB.


https://farmdocdaily.illinois.edu/2024/04/what-explains-the-disparity-between-usda-and-conab-over-brazils-soybean-crop-size.html?utm_source=newsletter&utm_medium=email

If USDA wishes to follow Conab and other private forecasters who believe Brazil soybean production is less than 155 million metric tons, it must find corresponding decreases in use. According to USDA, the use data it reviews suggest this cannot be the case, so its production number must remain higher (see for example commentary in the February 2024 WASDE report.) In comparison, Conab has not had to address the near-zero lower bound on stocks in their soybean balance sheet until now.

Some private analysts are also reckoning with discrepancies between production and use estimates for Brazilian soybeans. Agroconsult is a private Brazilian consultancy that has recently raised its forecast for the 2023/24 soybean crop to 156.5 million tons (5.75 billion bushels), very close to that of USDA. Using its own novel methods to assess planted area, Agroconsult has said soybean farmers planted 46.4 million hectares (114.6 million acres) this season. That is 1.2 million hectares (2.9 million acres) more than projected by Conab and 500 thousand hectares (1.2 million acres) more than USDA’s estimate. After surveying fields in 15 Brazilian states and considering that the weather differed by region, Agroconsult’s yield estimate is the same as the USDA (see Rally da Safra, 2024).

 Final Considerations

While USDA often uses official statistics from foreign statistical agencies in its global supply and demand estimates, USDA may also develop its own estimates to reconcile the balance between production, use, and inventories. In the case of Brazil soybean production, USDA has provided estimates substantially higher than those of the official Brazilian government agency, Conab. Higher production estimates are necessary to reconcile USDA’s world soybean balance sheet with its chosen estimates for use and the near-zero lower bound on estimated soybean inventories. Conab is nearing a similar situation given its own ending stocks estimate for 2023/24. This implies the necessity of a major re-think in how these agencies develop their estimates and a possible revision in past estimates that may create some volatility in soybean markets. However, projecting the timing and nature of this reckoning is difficult.

A consensus soybean production estimate for Brazil would alleviate some of the current uncertainty about the global soybean supply and demand balance. However, the presence of government supply and demand estimates, even very accurate ones, has never stopped traders and analysts from disagreeing in the past. Nor has it eliminated the possibility that crop conditions and expected production levels will continue to change over the growing season. Based on the relatively limited upward movement in soybean prices over the past six months, many analysts are suggesting the cash and futures markets are trading USDA’s Brazil production data for now.