July 28, 2011 / 2:53 PM / 7 years ago

WRAPUP 1-Prices, demand drive agribusiness results

* Higher grain prices give a boost

* Bunge says results across agribusiness chain improve

* Agriculture fundamentals highly favorable -Potash Corp

NEW YORK, July 28 (Reuters) - Higher grain prices and strong demand are boosting the fortunes of North American companies with exposure to agricultural markets, a bright spot in an earnings season that has been marked by disappointing results from a range of manufacturers.

Fertilizer makers, food processors and seed producers all reported strong quarterly results on Thursday and sounded upbeat about their outlook for the rest of the year.

This is in sharp contrast to comments from manufacturers over the last week, warning that the second half of 2011 could slow down and consumers remain nervous due to debt concerns in Europe and the United States.

“Even with uncertainty around macroeconomic issues - including U.S. and European sovereign debt concerns - weighing on equity markets and investors’ tolerance for risk, the strength of agricultural fundamentals continues to provide a highly favorable environment for our business,” Potash Corp POT.N POT.TO said in a statement on Thursday.

Potash Corp, the world’s largest fertilizer maker, reported a 75 percent jump in quarterly earnings on higher prices for potash, phosphate and nitrogen-based crop nutrients. [ID:nN1E76Q2DX]

Potash Corp anticipates strong demand from India as inventories have been reduced to critically low levels.

Worldwide demand is growing quickly even as grain supplies are tight, thus pushing up prices. Food price inflation is set to remain high and even worsen in the years ahead. [ID:nN1E76C1H5]

Manufacturers such as Emerson Electric (EMR.N), on the other hand, said industrial markets are slowing due to slowing U.S. and European economies. [ID:nN1E76Q132]

Data from the Federal Reserve on Wednesday showed demand for long-lasting U.S. manufactured goods fell in June and economic activity across much of the nation slowed through mid-July, casting doubt over how quickly the economy might escape its soft patch. [ID:nN1E76Q09V]

DuPont DD.N, the No. 3 U.S. chemical company, posted a better-than-expected quarterly profit helped in part by strong sales of seeds. [ID:nN1E76R01I]

Sales of DuPont’s genetically modified seeds and herbicides in the agricultural unit rose 10 percent to $2.99 billion. The unit also brought in the largest slice of DuPont’s operating income, roughly $826 million.

In June, global agribusiness company Monsanto Co MON.N posted a nearly 80 percent jump in net income due to strong sales in its core seeds and genetic traits businesses.

On Thursday, agricultural processor Bunge Ltd’s (BG.N) second-quarter results beat estimates, and said results improved in most parts of the agribusiness chain when compared to last year. [ID:nL3E7IS353]

“The agribusiness markets will be characterized by the Northern Hemisphere harvests and continued strong global trade in response to the relatively tight supply situation,” Chief Financial Officer Drew Burke said in a statement.

“We expect our agribusiness results to continue to be driven by our grain business.” (Reporting by A. Ananthalakshmi, Euan Rocha, Ernest Scheyder and Abhishek Takle, editing by Dave Zimmerman)

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