Shares in Agrium rose to a 17-month high after the farm retail and fertilizer group, for a second time in two months, raised its earnings forecasts, citing "excellent results" across its crop input business.

The Canada-based group, which last month raised its forecast for second-quarter earnings to $4.18-4.78 a share, lifted its estimate again, to a record for the April-to-June period of $5.40-5.50 a share.

A result at this level would represent an increase of some 17% year on year, and comfortably beat market forecasts, pegged at $4.67 a share.

Furthermore, Mike Wilson, the Agrium chief executive, said that earnings before interest, tax, depreciation and amortisation (ebitda), which investors have forecast easing some 2% at a group level, would rise in all three of its business units.

The company is formed around three divisions, retail, which sells to growers,  the wholesale division, which produces fertilizers, and advanced technologies specialty products unit.

Agrium shares rose 3.3% to Can$97.04 in early deals in Toronto, their highest since February last year, before easing to close at Can$96.69, a gain of 3.0%.

'Positive outlook'

Mr Wilson attributed Wednesday's upgrade to "excellent results across our entire crop input business", echoing comments made at the last revision.

Its businesses had enjoyed "robust demand" throughout June, despite the early start to the North American spring sowing season, which might have been expected to bring an early close to farmer demand.

Indeed, Agrium's outlook "remains very positive", supported by the impact of elevated grain prices, boosted by fears for the impact on crops of the worst US drought since 1956, in spurring demand.

The group also flagged "an expected tightening in international crop input markets".

Sector recovery

The comments echoed those earlier on Wednesday from nitrogen fertilizer giant Yara International, which highlighted the role of elevated grain prices in boosting demand for nutrients, to boost productivity.

Indeed, they represent a further fillip to a fertilizer sector boosted by a bigger-than-expected rise in Yara profits in the April-to-June quarter, and a decline in earnings at US-based Mosaic which was not as severe as Wall Street had factored in.

Furthermore, Intrepid Potash unveiled sales for the April-to-June quarter which exceeded guidance.

Shares in fertilizer groups have already recovered substantially over the last month, in line with the grains rally, boosted by expectations that farmers will focus on raising productivity to cash in on elevated crop prices.