Nitrogen fertilizer groups look among the main winners of the surprise cuts to US crop estimates, Credit Suisse said, as other analysts cited the better prospects for farm equipment groups.

Tuesday's revisions, in which the US Department of Agriculture cut yield estimates for both this year's corn and soybean crops, was "bullish" for shares in all fertilizer groups, Lars Kjellberg said from Credit Suisse's London offices.

The USDA was, in its monthly Wasde reports on world crop supply and demand, continuing to provide "bullish datapoints" for crop prices by cutting supply hopes, he said.

However, the latest changes were particularly helpful for nitrogen groups in underpinning the prospect of higher corn sowings next spring.

"Higher corn prices should drive increased corn acreage in 2011 and higher nitrogen applications and pricing -a lot of nitrogen fertilizer is used on corn, none on soybeans," Mr Kjellberg said.

Credit Suisse remained "buyers" of shares in nitrogen groups such as Agrium and CF Industries in North America, Russia's Acron, Industries Qatar in the Middle East and Asia's Taiwan Fertilizer.

Tractor drivers

In North America, Sterne Agee analysts said that the corn data, which was "supportive" for prices of the grain, and a surprise cut to USDA soybean yield estimates,  should "benefit" shares in tractor makers.

The broker - which has "buy" ratings on shares in farm equipment manufacturers Agco and Deere & Co, and in Titan International, which makes tractor tyres – also took succour in data showing German tractor registrations soaring 59% last month, compared with October 2009.

"Year-on-year tractor registrations grew for the fourth month in a row as… demand has picked up," Sterne Agee said.

"This continues to be consistent with our belief that the European market is recovering following a sharp downturn, with the German market leading."

Market reaction

However, shares in agribusiness groups proved mixed on Wednesday, in line with the general stock market mood.

Shares in nitrogen giant Yara International closed 3.2% lower at NOK309.20 in Oslo, with other fertilizer shares lower too. CF Industries stock ended 0.8% lower at $124.60 in New York, while Agrium shares finished down 1.1% at Can$84.00 in Canada. 

Farm equipment group stock did better, with Agco shares closing 1.5% higher at $45.90, and Deere stock up 1.3% at $78.92.