Profit opportunity for disciplined farmers

May 14, 2026 | Kriss Nelson

The USDA’s latest World Agricultural Supply and Demand Estimates report delivered a notable shift in tone for grain markets, particularly for wheat.

While much of the focus often centers on soybeans and corn, Al Kluis, managing director of Kluis Commodity Advisors, says the biggest surprise in the report came from hard red winter wheat.

USDA lowered harvested acres for hard red winter wheat to just 67.9% of planted acres while also trimming yield expectations. Kluis says the move reflects ongoing moisture challenges in western growing regions and could signal broader acreage shifts ahead.

“That could be an indicator that we will see in the western areas greater abandonment of corn and soybeans unless there’s a major improvement in moisture,” Kluis says.

The change may also alter the relationship between wheat and competing crops. For years, expanding soybean acreage and declining wheat acres have weighed on grain markets. But Kluis says stronger wheat prices could reverse that trend.

Rather than wheat dragging corn and soybeans lower, Kluis says improving wheat economics both in the U.S. and globally could shift acreage decisions across North America in the coming years.

“We only have so many acres when you look at planted corn, soybean and wheat,” Kluis says. “We’ve constantly seen wheat acres go down and soybean acres go up. And that’s been true not only in the U.S., but in North America.”

Kluis says stronger wheat prices are already beginning to change the outlook.

“Now all of a sudden, you’ve got $7.50 new-crop wheat futures in Kansas City for 2027,” he says. “Those farmers will again revert back to planting more wheat.”

Kluis says the shift could create  an “interesting acreage battle” heading into the 2027 crop year and become a significant market factor for crop prices this year and for acreage decisions next year.

Tighter ending stocks

The WASDE report also showed tighter ending stocks projections for corn, soybeans and wheat for the 2026-27 marketing year.

The report projected the 2026-27 U.S. soybean crop at 4.435 billion bushels, up 173 million bushels from last year, reflecting trendline yields and increased harvested acreage. Total supplies are expected to rise 188 million bushels from the previous marketing year.

U.S. soybean ending stocks for 2026-27 are projected at 310 million bushels, down 30 million bushels from the revised 2025-26 forecast. The 2026-27 U.S. season-average soybean price is forecast at $11.40 per bushel, compared to $10.40 in 2025-26. Soybean meal is forecast at $310 per short ton, down $5, while soybean oil is projected at 70 cents per pound, up 7 cents.

Despite concerns about sluggish exports and weaker Chinese soybean buying, Kluis says demand has  strengthened in other areas.

“With optimistic yield forecasts, we’re still going to have smaller piles of grain in the U.S. and in the world next year,” Kluis says.

Soybean exports have softened recently, particularly with slower Chinese demand, but domestic crush demand continues to expand.

USDA projects U.S. soybean crush at 2.75 billion bushels for 2026-27, up 120 million bushels from the prior year, supported by strong soybean oil demand tied to biofuels.

Corn exports, meanwhile, have remained stronger than many expected.

“We’ve had three years of low prices, and we should not be surprised we’re starting to use a lot more product,” Kluis says. “Low prices work, but it takes time.”

That increased usage is expected to continue into 2026-27. Domestic soybean oil demand is forecast  7% higher, with soybean oil use for biofuels projected at 17.8 billion pounds, up 3.6 billion pounds from 2025-26 following stronger EPA Renewable Volume Obligations.

But will global buyers wait for lower prices? “All of a sudden, the buyers of the world are looking at it and going, ‘Hey, we cannot be complacent. We have to be aggressive and buy on every setback,’ ” Kluis says.

This doesn’t necessarily mean markets will move sharply higher immediately, but Kluis believes prices should remain better supported than they have been in recent years.

The season-average soybean price is projected at $11.40 per bushel, compared to $10.40 in 2025-26.

Is there light at the end of the tunnel?

While he is not forecasting a straight move higher in prices, Kluis says the report points toward a stronger long-term pricing environment and potentially improved profitability for farmers who can remain disciplined with marketing plans.

The outlook is also influencing storage and marketing strategies.

Historically, Kluis says he has often sold the majority of corn and soybean inventories by January. This year, however, stronger long-term fundamentals may encourage more farmers to hold grain deeper into 2027.

USDA also projects soybean exports to rebound to 1.63 billion bushels in 2026-27.

Even with stronger export projections, USDA noted the U.S. share of global soybean trade may continue facing pressure from large South American supplies and stronger domestic crush demand.

“Looking at these numbers, I’m probably going to be using my bins to carry a lot of the 2026 harvest into May through July of 2027,” Kluis says.

Kluis cautions farmers against becoming overly aggressive sellers too early in the marketing year, even as they reward rallies with disciplined sales.

“I still think that you want to keep your farmer position where you’re not selling a whole new crop in August or October,” he says. “But if you are getting your cash crops sold in this rally, you’ve got 20% to 30% of your new crop priced ahead. I think this can be a very good year.”

Kluis says he began discussing the possibility of improved profitability for 2027 and 2028 earlier this year at Commodity Classic, though many farmers were skeptical at the time.

“When I was at Commodity Classic, I said we were going through some of the toughest times in 2026, but that we were likely to see better prices and better profits by 2027 and 2028,” Kluis says. “People were polite, but they were very skeptical.”

Now, Kluis believes the numbers are beginning to support that outlook.

“If you’ve slugged your way through the last couple of years, you still have to be disciplined and realistic, but I think we have better price and profit opportunities ahead of us,” he says.

Written by Kriss Nelson.

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