How so? Supply goes down while demand is the same --> Price goes up --> Profit margin for the farmer increases --> Profits of mustard > profits of rapeseed --> Farmer produces mustard instead of rapeseed. This is exactly the consequence of supply and demand.

The only noteworthy fact is that we got in this situation because it was not a completely free market but a regulated market due to subsidies for rapeseed, artificially increasing their profit margin.

This is exactly how a price shift in the supply demand curve works in basic macroeconomics.

If you price shift a good upwards and the demand remains static, yield per good increases and then supply should increase as suppliers willing to supply at the new price is greater than supplier willing to supply at the old price.