Monsanto backed ideas of an upbeat swansong as an independent company as it unveiled better-than-expected earnings, helped by a surge in Argentina corn sowings, and expectations of a jump in US cotton plantings.

The US-based group, which is being bought by Germany's Bayer for $66bn, said that its earnings for the year to the end of August were expected to come in at the upper end of the range of $3.95-4.44 per share that it had previously guided too.

The upgrade "reflects the company's increased confidence in the growth expected for the year", Monsanto said, restating an expectation that its core seeds division will achieve "mid-single digits"  growth in gross profits, in percentage terms.

"We're increasing confidence in the outlook for the rest of the year," said Huge Grant, the Monsanto chairman and chief executive.

However, Monsanto said that its sprays division, whose products include glyphosate weedkiller Roundup would now see full-year gross profits at the lower end of the range of $850m-950m previously guided too.

'Even greater acreage growth'

The comments followed a December-to-February quarter in which the group reported a 29% rise to $1.37bn in earnings, on revenues up 12.0% to $5.07bn.

The earnings were equivalent to $3.19 per share, excluding one-time items, ahead of the $2.79-per-share result that investors had expected.

Headline earnings growth was helped by – besides the sale of the Latitude wheat fungicide, and comparison with a year-before figure marred by devaluation in the Argentine peso – a 12.3% rise to $1.93bn in gross profits from corn seed.

Besides flagging growth in sales in Brazil, Europe and the US, Monsanto flagged that it was "estimating even greater acreage growth than previously expected, at more than 40%", above the previous estimate of a 25% increase.

'High grower demand'

The group also reported a quadrupling to $77m in gross profits on cotton seed, saying it "continues to see high grower demand" for its Bollgard II XtendFlex product, which is genetically modified for resistance to insect pests and herbicides.

Monsanto restated that sowings with the brand are expected to top 4m acres in the US this year, a result which would be equivalent to roughly one-third of the overall area that farmers are expected to plant with the fibre, seen by the US Department of Agriculture as rising by 21% year on year.

In soybeans, the group signalled increased expectations for its genetically modified Roundup Ready 2 Xtend brand.

After saying in January it was "well-supplied for more than 15m acres of the product", Monsanto on Wednesday said that it "now expects 18m acres" to be planted in the US, following a series of state approvals.

Shares rise

The announcement received a welcome response from investors, who sent Monsanto shares higher to $116.37 in early deals in New York, their highest since June 2015.

The stock stood at $115.98 in late morning trade, up 1.5% on the day.

The rise closed some of the discount in the stock price to the $128 per share being offered by Bayer – a discount attributed to doubts over the deal being completed.

"We are heartened to see the deals ahead of us making progress," Mr Grant said, referring to success by other tie-ups in gaining regulatory approval, with ChemChina overnight receiving approval from both European Union and US regulators for its takeover of Syngenta.

Mr Grant added: "The unique thing about this deal is there a very limited amount overlap," implying a lower chance of antitrust official imposing measures such as asset disposals as a condition of consenting to the tie-up.