January 5, 2011 / 4:32 PM / in 7 years

UPDATE 1-Mosaic's strong quarterly profit lifts shares

* Stock up 3.1 percent in midday trading

* Fiscal Q2 adj EPS beat Street by 10 cts/shr

* CEO says confident in fiscal Q3 DAP price forecast

* CEO says 92 mln-93 mln acres of U.S. corn needed (Adds spring planting, UN food study; updates stock)

By Ernest Scheyder

NEW YORK, Jan 5 (Reuters) - Strong quarterly profit from Mosaic Co (MOS.N) boosted the fertilizer producer's shares on Wednesday, as investors continued to pile into the stock ahead of an expected strong spring planting season.

The stock was up $2.36 or 3.1 percent at $77.36 in late morning, continuing a march begun in 2010 when shares rose about 28 percent.

Mosaic posted a better-than-expected quarterly profit after the closing bell on Tuesday, helped largely by strong U.S. crop prices.

Jim Prokopanko, Mosaic's chief executive, told Reuters he expects prices to move higher still in 2011. [ID:nN04219960]

"It's a tight supply and demand equation," Prokopanko said.

About 92 million to 93 million acres of U.S. corn are needed for a "healthy balance" of the crop with soybeans, he said.

"What we see in corn prices today reflects market signals," Prokopanko said.

Mosaic should see a "very good" fiscal fourth quarter, which ends in May, executives said on a conference call Wednesday morning.

Global food prices hit record highs last month, and a United Nations food economist told Reuters the organization is worried about the unpredictability of weather activity around the world, given the already high price levels and low supply of some grains. [ID:nLDE7041BM]

DAP PRICING

Mosaic expects to sell its popular diammonium phosphate fertilizer, or DAP, at $510 to $540 per tonne in the fiscal third quarter. That is sharply above the year-ago period, when the company sold the same product for an average of $336 per tonne.

Prokopanko said he is confident Mosaic can achieve the higher price, mostly because much of the fiscal third-quarter stock has been sold.

"We're pretty sure what we're forecasting," he said.

Elsewhere in the fertilizer sector, shares of CF Industries (CF.N) were up 1.2 percent at $136.62, shares of Agrium (AGU.TO) rose 2.1 percent to $92.55 and shares of Potash Corp (POT.TO) rose 2.4 percent to $160.49.

Agribusiness giant Cargill Inc [CARG.UL] owns roughly 64 percent of Mosaic's stock. (Reporting by Ernest Scheyder, editing by Dave Zimmerman and Matthew Lewis)

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