Farmland market indicators

Global corn production to edge down in 2022 according to December WASDE 

• Global corn production is forecast down 5% in MY 2022, due to declines in the U.S. and E.U.
• U.S. production is estimated to fall 8% to 354 mil tons (MMT) in 2022
• Brazil 2022 production is forecast to increase 9% to 126 MMT

Broad-based production expansion to push global soybean production to record high in 2022

• Global soybean production for the 2022 marketing year is expected to increase 10% to a record high of 391 MMT, with Brazil accounting for 70% of the projected increase.
• U.S. soybean production is forecast to decrease by 3% to 118 MMT as lower yields offset a modest increase in soybean acreage (MY September 2022 to August 2023).
• Brazilian production is anticipated to increase 20% in 2022 due to a record harvest (MY February 2023 to January 2024) to 152 MMT.

USD maintains strength against most currencies

• The U.S. dollar finished Q3 2022 strong against most competing currencies, supported by continued safe-haven demand and expectations of further interest rate hikes by the Fed.
• The U.S. dollar appreciated 3% against the Brazilian real, 7% against the Australian dollar, 6% against the Canadian dollar, 11% against the Russian ruble, and 15% against the Argentinian peso.
• The strong dollar improves the competitive position of both non-U.S. exporters to global markets and importers to the U.S. 

U.S. corn exports continue to trend higher in the third quarter of 2022

• Total corn exports for the U.S., Brazil, and Argentina gained 4% in Q3 2022 on a four-quarter moving average basis, after trending slowly lower over the previous four quarters from Q2 2021’s high.
• Exports from these major producing countries have been supported at elevated levels as Ukraine corn production is sharply lower in both area and yield due to the ongoing conflict.
• U.S. four-quarter moving average corn exports at 15.9 MMT were 7% lower than last year and 1% lower than the previous quarter as competition from other exporters and relatively high U.S. prices have resulted in lower sales and shipments.  
• Brazil’s four-quarter moving average exports in Q3 2022 jumped 38% from Q2 and 16% from last year to nearly 8.0 MMT, while exports from Argentina (8.9 MMT) were up 3% from last year and down 8% from Q2 due to continued dry conditions.
• The strong dollar has favored exports from countries with weaker currencies such as Brazil and Argentina. 

U.S. soybean exports continue to slide in Q3 2022

• The global soybean outlook forecasts higher production, exports, and ending stocks.
• On a four-quarter moving average basis of 14.7 MMT, U.S. soybean exports in Q3 2022 were up 6% from last quarter and up 4% year-over-year.
• Exports from Brazil and Argentina slipped lower from the previous quarter.
• The four-quarter moving average of Brazil’s soybean exports at 19.8 MMT was down 3% from both last quarter and a year ago. Argentina’s soybean exports of nearly 1.1 MMT were 10% down from last quarter and 27% lower than a year ago. 

Prices for row crops ease lower, but remain near historically high levels

• Inflationary pressures begin to ease, and U.S. corn, wheat, and soybean prices slid lower in Q3 2022, but remain at historically elevated levels.
• The price of corn eased 1% lower to US$7.19 per bushel but was still 20% higher than last year, and lowered exports due to the strong dollar resulted in slightly higher domestic corn ending stocks.
• Soybean prices decreased 7% in Q3 to US$14.97 per bushel but remained 12% higher than one year ago.
• Wheat prices dropped 15% during the quarter but maintained a 23% premium over those one year earlier amid ongoing concerns around export crop shortages.
• Row crop prices continue to be supported by supply-side disruptions and elevated input costs.

2022 Q3 NCREIF quarterly row crop returns highest since Q3 2007

• Q3 2022 NCREIF row crop returns reached 2.67%, the highest Q3 quarterly return since 2007.
• Positive market momentum helped boost income returns and provided support for stronger appreciation returns.
• USDA farm income and wealth statistics project 2022 crop cash receipts to gain 19%, to US$285.5 billion.
• Although growth in cash receipts is expected to extend across most crops, those of corn, soybeans and wheat are expected to drive the majority of the gains.