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