June 15 (Bloomberg) -- Monsanto Co., the world's biggest seed producer, boosted its profit forecast for fiscal 2007 as rising demand for ethanol and animal feed led to a surge in U.S. corn planting. The shares rose to a record.

Profit in the year ending Aug. 31 will be $1.75 to $1.80 a share, excluding some items, compared with a previous forecast of $1.60 to $1.65, St. Louis-based Monsanto said today in a statement. Earnings were expected to be $1.69, the average estimate of 13 analysts surveyed by Bloomberg.

Monsanto said it grabbed market share from competitors such as DuPont Co. and increased sales of genetically modified corn seed. Demand also rose for Monsanto's Roundup herbicide. U.S. corn farmers, the world's largest growers of the crop, planted 15 percent more acres this year as the price of the grain jumped to a 10-year high.

``We'd much prefer they gain a point of overall market share than have more acres planted,'' Jason Dahl, who manages $1.2 billion including Monsanto shares at the Victory Capital Focused Growth Fund, said in a phone interview. ``They got both.''

For the third quarter ended May 31, profit was about $1 a share, including a 5-cent gain from the resolution of tax audits, Monsanto said in a preliminary earnings statement. Ten analysts surveyed by Bloomberg had estimated 77 cents, on average. Profit a year earlier was 61 cents a share.

Shares Rise

Shares of Monsanto rose $1.55, or 2.4 percent, to $64.86 at 4:03 p.m. in New York Stock Exchange composite trading, after earlier reaching a record $67.86. The stock has gained 65 percent in the past year.

The profit increase mostly reflects Monsanto's growing share of the gene-modified corn market, spokesman Glynn Young said. He declined to elaborate. Monsanto, the world's biggest developer of biotech crops, adds genes to corn, soybeans, cotton and canola to make them resistant to Roundup. The company also modifies corn and cotton to kill damaging insects.

Monsanto in April said its share of U.S. corn seed sales rose 3 percentage points to 30 percent. Analysts said that would rival DuPont's Pioneer unit, the world's largest corn-seed producer.

The company may have exceeded its previous market-share forecast as competing producers struggled to meet surging corn- seed demand, Soleil Securities analyst Mark Gulley said. He had estimated third-quarter profit at 77 cents a share and recommends buying the shares.

Market-Share Gains

Market-share gains boost profit more than a larger corn crop, Victory Capital's Dahl said. When farmers plant more corn, they may buy fewer soybean or cotton seeds, so Monsanto might only trade sales of one crop for the other, he said.

U.S. farmers said in a survey released March 30 that they planned to sow 90.5 million acres with corn this year, the most since World War II. The U.S. Department of Agriculture will update the planting estimate on June 29.

``We're having extraordinary performance in an extraordinary year for agriculture,'' Chief Executive Officer Hugh Grant said in the statement.

Monsanto sold out of ``triple stack'' corn seeds, which are the most profitable variety because they resist weed killer and two kinds of pests, the company said in April. Triple-stack corn will be grown on 16 million acres this year, up from 6 million, Monsanto has said.

Excluded Items

The full-year forecast excludes the $1.5 billion acquisition of cottonseed producer Delta & Pine Land Co., which will reduce earnings ``moderately'' because of seasonal losses during the fourth quarter, Monsanto said.

Also excluded are pending divestitures of the Stoneville and NexGen cottonseed units, including the write-off of in- process research and development. The Department of Justice is requiring the sales as a condition of the Delta & Pine Land acquisition. Monsanto can't detail the costs until the divestitures are approved, Young said.

The full-year tax rate may be as low as 29 percent, less than a prior estimate of 30 percent, Monsanto said.

Banc of America Securities analyst Kevin McCarthy said he is reviewing his per-share earnings estimates of 79 cents for the third quarter and $1.65 for the year.

``Favorable fundamental factors accounted for the lion's share of the upside,'' McCarthy said in a report. He rates the shares ``neutral.''

Monsanto will report final third-quarter results on June 28.

To contact the reporter on this story: Jack Kaskey in New York at jkaskey@bloomberg.net.

Last Updated: June 15, 2007 16:34 EDT