Farmers will shun grains and turn to plant ing cheaper oilseed crops like canola and soybeans this year, Daniel Basse, president of Chicago-based research and advisory firm AgResource Company said Feb. 23.
That will cause a shortage of grain supply late this year, Basse told farmers and analysts at the Canadian Wheat Board’s annual GrainWorld conference.
“Farmers around the world, whether it’s United States, Russia, Latin America or China are leaning toward planting more oilseeds and away from planting more grains,” Basse said. He predicts world grain production to drop three to five per cent this year.
Oilseeds were the hot-priced crop last year, but wheat and corn will be the crops to watch in the next year as a shortage looms, Basse said.
Even with a potentially large oilseed crop, prices will be relatively strong, Basse said. Soybean harvest lows are projected at $7 to $7.50 per bushel, still $2 to$3 higher than prices in 2005-06, he said. He estimates canola harvest lows at $355 to $375 per tonne.
With high input costs, however, those crops will be marginally unprofitable, he said. “The market’s going to have to do what it can to get rid of the excess supply,” Basse said.
A weakening U. S. dollar after the first quarter will boost commodities, he predicted.
The world produced a record 408 million tonnes of oilseeds in 2008. Oilseeds include soybeans, cottonseed, peanut, sunflowerseed, rapeseed, copra and palm kernel. Canada produced just over 16 million tonnes.