Seed technology giant Monsanto reported its first-quarter earnings which were well-received by the market. The company raised its full-year forecast by a penny on both the high and low ends, and raised its free cash flow guidance for the year. The company noted that it is seeing strong early business momentum for the upcoming planting season.

For the quarter the company grew ongoing quarterly EPS by $0.39 year over year -- the strength was roughly split between the seeds business and productivity segments. Sales for the quarter were 21% higher with gross profits clocking a 27% gain over the prior year. Free cash flow for the quarter jumped 75% to $1.5 billion thanks to customer prepayments in advance of the U.S. planting season, as well as increased earnings turning into cash flow.

Monsanto shipped more corn and soy volume in the first quarter of 2013 in the U.S. than in the first quarter of 2012 and corn was an area of particular strength. Part of this strength is derived from expectations of realizing a 5%-10% increase in corn prices this year as farmers are seeking premium, better-performing seed from its stock.


Chairman and CEO Hugh Grant noted that the first-quarter strength from corn was especially driven by Latin America. Farmers in that region are rapidly adopting genetically modified seeds, which is benefiting the company in both increased volumes and higher selling prices. Farmers in both Argentina and Brazil are upgrading their product lines to new seed products from Monsanto. These products have more than one genetically modified trait and come with higher margins for the company.

Monsanto's not the only one noting strength in corn. Just last week Mosaic  released 2012 figures and the company noted growth in Brazil was up 19% from 2011, with Latin America up 18% as a whole. Investors need to watch to see if this strength in the agriculture sector is just specific to Monsanto and Mosaic or if it's a new trend. Both PotashCorp  and CF Industries  are still due to report on Jan. 31 and Feb. 11, respectively; if both companies witness similar strength, it'll bode well for the entire industry's outlook over the coming year.

Looking further ahead for Monsanto, the company expects to earn between $4.31 and $4.41 for the full year. It's also expecting full-year free cash flow to be between $1.8 billion and $2 billion. The company is not known for altering its guidance so early in the year, but Grant noted that his company has "better line of sight than in a typical year."

It's a great start to the year for the company in what's traditionally a slow quarter. Growth in Latin America will continue to transform Monsanto's business into a year-round performer.

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The article Growth at Monsanto, but Where? originally appeared on Fool.com.

Matt DiLallo is  Long Jan 2015 $70 calls on MON, Short Jan 2015 $70 puts on MON, Short Jan 2013 $90 calls on MON. The Motley Fool owns shares of CF Industries Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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