Mosaic downplayed expectations for the much-proclaimed potash market recovery, saying it was to prove a "two step" process, and forecasting that prices would continue to slide.
The US fertilizer giant said that while shipments in the phosphate sector had "nearly recovered in one big step" from last year's slowdown, when farmers scrimped on applications during the credit crunch, much of the revival in potash would go unrealised until the autumn.
Mosaic said it expected, at $300-330 a tonne, lower prices for its potash in the June-to-August period than in the previous quarter, when it received $336 a tonne, or in the same period a year before, when the average was $382 a tonne.
Sales volumes would also dip, quarter on quarter, before seeing "significantly higher volumes" in the September-to-November period.
The group was also more downbeat on the rebound in world potash shipments than some of its peers, pegging them at 46m-48m tonnes this year, and to 52m-54m tonnes in 2011, below PotashCorp forecasts of 50m tonnes and 55m-57m tonnes respectively.
"Potash shipments are expected to recover in two steps," Mosaic said, in comments more conservatives than those voiced in much of the trade over the last year, predicting a sharp snap-back in the market.
Nonetheless, chief executive Jim Prokopanko trumpeted the group's "bright" prospects after a March-to-May quarter in which the first step of the potash recovery had seen sales near-double to 1.8m tonnes by volume, with higher prices in phosphate making up for lower volumes.
"We are pleased with our strong results," Mr Prokopanko said.
"Crop nutrient application rates and shipments have snapped back from last year's levels. Phosphate demand is strong, potash demand is recovering and prospects for the agricultural market are positive."
Indeed, with demand growing for grain and oilseed crops "farmers will need to continue to plant record area and reap record yields in order to meet projected demand", the group said.
Ahead of forecasts
The potash recovery's first leg helped group sales rise by 16.8% to $1.86bn in the March-to-May period.
Earnings more than doubled to $396.1m, equivalent to $0.89 a share, marginally above Wall Street expectations.
The results received a lukewarm response from analysts at Salman Partners, who said "we may see some weakness in the potash-levered names as a result of the soft volume and pricing guidance from Mosaic".
National Bank said the results were "light on revenues... but higher on earnings per share [than expected] assisted by higher margins and a lower than projected tax rate".
It also flagged the risk of the shutdown of Mosaic's South Fort Meade phosphate mine in Florida, which is being challenged by environmentalists on grounds that it may damage water quality.
Nonetheless, the bank restated an "outperform" rating on Mosaic stock, with a price target of $67.00, saying that it expected a "stronger operational performance" from the group next year as fertilizer demand improves.