GrainCorp shares rebounded after the Australian grain handler raised its profits outlook for a second time, backed by strong exports, and the prospect of “another well-above-average” harvest in its east coast stamping ground.

The Syndney-based group, which in April raised its earnings guidance for the year to the end of September to Aus$310m-370m from Aus$235m-280m, lifted the forecast again on Wednesday, to Aus$365m-400m.

Guidance for underlying ebitda, lifted in April to Aus$590m-670m from Aus$480m-540m, was raised to Aus$680m-730m.

GrainCorp shares – which had fallen nearly 30% from an early-May high, tracking the pullback in grain prices amid mounting economic concerns – closed up 5.1% in Sydney at Aus$8.03.

‘Well-above-average crop’

The guidance upgrades reflected “reflects outstanding execution across each of GrainCorp’s business areas and expectations for the east coast Australian crop in 2022-23”, said Robert Spurway, the GrainCorp chief executive.

The group’s logistical operations were running “at close to full capacity”, despite disruptions such as heavy rains in eastern Australia.

Furthermore, the group said that “we expect another well-above-average east coast Australian crop in 2022-23 based on crop development we have seen to date, and a favourable three-month rainfall outlook”.

Persistent rains which have tested eastern Australian logistics have put the region on course for a third successive bumper winter crop harvest if, as Rabobank has warned, having also destroyed some crops and raised the threat of quality damage.

Mr Spurway added that “this positive outlook is driving an increase in fourth quarter [July-to-September] activity and supporting export volumes, forward contracted grain sales and supply chain margins”.

GrainCorp’s grain exports have reached 7.9m tonnes so far in 2021-22, already matching the previous season’s result, which was in turn more than the total of the previous three years put together.

‘Strong ongoing demand’

The group, whose operations also extend into malt and vegetable oils, said that its full-year results would show records for its processing unit, as well as the agribusiness division.

Indeed, processing, feeds, fats and oils businesses have benefited from “from strong ongoing demand for crude and refined vegetable oils, and renewable fuel feedstocks such as used cooking oil and tallow”.