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momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
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Current oilseed prices are changing crop rotations



by Frédéric Hénin, Editor-in-Chief, Terre-net


Article published in Terre-net Magazine


The severe winter conditions and water shortages are significantly restricting the rapeseed potential production in Europe. In early April, ODA1 estimated the European crop at 19 million tons for 2012. In the United States, farmers seem to give priority to soybean over corn crops, and in Canada, canola is preferred to spring wheat.

With a crop figure that is lower by 17 million tons than the 35 million tons anticipated at winter’s end in Argentina, Uruguay and Paraguay, the soybean production is altering the oilseed situation––and by extension that of grain––for months on end.

Because these markets are not, since the end of the winter, counting on Europe to make up for the plant-based protein deficit, all eyes are now turned on the U.S. and Canada. Next autumn, many will be watching the Australian situation.

In early April, ODA foresaw a European grain crop of 19 million tons for this summer, provided no new climate episode occurs until then.

More serious than last year

ODA’s forecasts include 5.2 million tons in France and 1.5 million tons in Poland. The European 2012/13 crop would end up with a reduced carry-over stock of one million tons.

The situation is more serious than it was last year. While we are now only in spring, the severe winter conditions and the current water shortage are reducing France’s potential production to the July 2011 level, which was impacted by a drought two or three months before that date! In other words, any worsening of he water deficit will inevitably lead in lowering all these forecasts, at the national as well as the European level.

An identical scenario in Australia

Markets have recently incorporated this parameter, since rape and soybean prices keep rising at a frenetic pace.

With the return of milder temperatures in the U.S. and Canada, farmers might be tempted to revise crop rotations. American farmers might give priority to soybean over corn planting. And in the States where wheat is harvested early, this legume could even be sowed following grain.

As a matter of fact, the “corn price/soybean price” ratio of 2.6 (or higher than the 2.6 mainstay level) motivates American farmers to prefer corn instead of soybean. Yet, the current campaign is ending with tight corn reserves and an increased demand from China to feed its expanding livestock holdings.

In Canada, canola will probably be favored to spring wheat, since the price of wheat nears €500/ton. The situation might be identical in Australia next fall, since the 2011/12 soybean shortage will still be an issue! The drop in wheat production might even be aggravated by rising prices for sheep meat, which makes ovine breeding more lucrative.

Under these conditions, Europe could, in the coming harvest, face difficulties in importing the 3.4 million tons of rapeseed required to meet its needs, since only Ukraine and Australia are producing the highy coveted non-GMO seeds.

1 ODA, Offre et Demande Agricole, is an agricultural trade risk management and control company.

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Paris, 18 December 2018