Farmers will shun grains and turn to planting oilseed crops like canola and soybeans this year, Daniel Basse, president of Chicago-based research and advisory firm AgResource Company said last Monday.
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 in Winnipeg.
“Farmers around the world, whether it’s United States, Russia, Latin America or China are learning toward planting more oilseeds and away from planting more grains,” Basse said. He predicts world grain production to drop 3 to 5 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 $2-3 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.