TheChek News Flow

Reports Q2 (Jun) earnings of $4.37 per share, excluding non-recurring items, $0.24 better than the Capital IQ Consensus Estimate of $4.13; revenues rose 6.2% year/year to $7.34 bln vs the $7.15 bln consensus.

Market outlook:

• Favorable growing conditions in most major agriculture regions have boosted global crop production prospects in recent months. Growers in the U.S. Corn Belt have particularly benefitted from advantageous growing conditions...Grower margins are more sensitive to changes in crop prices than any other variable, so lower crop prices would result in lower per acre cash margins; however, strong crop yields will offset some of the crop price decline. While the financial benefit of applying crop inputs does not change significantly at current crop prices versus the prices earlier in the year, some precautionary applications of crop protection and plant health products may be impacted.
  
• Wet conditions throughout many areas of North America delayed herbicide application early in the growing season. These conditions were conducive to disease development, which has supported fungicide demand; however, there have been some areas in the Northern U.S. and Western Canada that have continued to struggle to get equipment into wet fields. In general, we expect that growers will continue to promote optimal plant health through application of crop protection products and nutritionals in order to maintain yield potential.
  
• Crop nutrient demand in the third quarter to date has been steady, despite lower crop prices. With 2013/14 logistical constraints fresh in the memories of buyers, the retail chain has sought to re-fill the empty North American supply chain following strong demand in the first half of 2014.