Iowa Farmland Values are Setting Up for a Correction

• Introduction to the Iowa Farmland Value Study: Klarenbach Research has released its 2024 Iowa Farmland Value Study, the third in a series analyzing farmland values in North America, following studies on Saskatchewan and Alberta.

  Read our study here: 

  https://www.grainreport.klarenbach.ca/p/iowa-farmland-value-study-2024-61bc

• Historical Farmland Value Corrections in Iowa:
  • 1922-1933: A 59% price correction over 11 years, bottoming near the 61.8% Fibonacci retracement level.
  • 1979-1986: A 73% decline over seven years, finding support near the 61.8%-78.6% Fibonacci retracement range and notably retesting the 1922 resistance level.
  • 2013-2018: A five-year correction resulting in a 23% drop in inflation-adjusted values, approaching the 1979 resistance and the 23.6% Fibonacci retracement level.
• Current Market Indicators and Outlook:
  • Bearish Divergence: The study identifies "triple bearish divergence" where higher price peaks correspond with lower RSI highs (e.g., 1979: 92.75, 2013: 88.85, 2023: 75.93), often signaling a market top.
  • RSI Below 70: The RSI dropping below 70 in 2024 (69.77) after a lower high suggests a potential market rollover.
  • Price Below Two-Year EMA: The price breaking below the two-year exponential moving average, combined with overbought RSI conditions and bearish divergence, strongly suggests an imminent pullback.

• Conclusion: The analysis suggests a potential pullback in Iowa farmland values based on converging technical indicators. The study aims to provide valuable insights for farmers, lenders, and investors.
• Access to the Study: The full Iowa Farmland Study can be accessed by subscribing to the Klarenbach Grain Report newsletter via the provided link in the description or by visiting klarenbach.ca.

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Trent Klarenbach, BSA AgEc, publishes the Klarenbach Grain Report and the Klarenbach Special Crops Report.

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