Viterra's flagging shares recovered 6.5% after the agribusiness group revealed a smaller fall in earnings than investors had expected, and forecast a series of fillips for its core Canadian operations.

The Canada-based company said a Canadian Wheat Board target of exporting 18.7m tonnes of wheat and barley over 2009-10, the second largest campaign of the last decade, "is achievable and may be surpassed" and would offset weaker shipments of canola and peas.

"Management remains optimistic that it will see solid industry volumes through the remainder of the crop year," said Viterra, which relies on CWB for a big chunk of its handling business.

A rise in canola sowings in Canada, albeit being undermined by wet weather, boded well for the farm supplies business.

"A large portion of Viterra's proprietary seed varieties are canola, and producers tend to invest in more crop inputs when growing oilseeds," the group said.

And a revival in hog prices, after one of the worst ever recessions for Canada's producers, was a "positive signal" for feed manufacturers as well as farmers.

"We are in a position of strength for fiscal 2011," Mayo Schmidt, the Viterra chief executive, said, flagging also prospects for bumper grain crops worldwide.

"As a significant owner of key grain handling and marketing assets in both hemispheres, volume is a key driver in Viterra's ability to maximize efficiencies and earnings."

Margins slide

The comments came as the group reported a 30% slide to Can$18.4m in earnings, equivalent to Can$0.05 cents a share, for the February-to-April period.

While revenues jumped 29% to $269.9m, fuelled by acquisitions such as ABB Grain, profits were hit by weaker-than-expected margins at the Australian grain handler and higher interest payments from extra debt taken on to pay for the deals.

Nonetheless, the result was better than the Can$0.04 that analysts had expected.

Viterra shares, which closed on Friday at their lowest level since December 2008, jumped to $Can8.28 in early deals in Toronto, before giving up some ground to stand at Can$8.17, up 5.1% on the day.