The Australian grain handler, GrainCorp nudged hopes for full-year earnings higher despite warning of a drop in profits at its core grain handling division, as low prices persuade farmers to hang on to crop.

The company, unveiling its best first-half profits for at least a decade, edged its guidance for full-year earnings before interest, tax, depreciation and amortisation (ebitda) higher to AUD190-210 million (US$159-$175 million) from AUD180-210 million (US$150-$175 million).

After-tax earnings would come in at AUD75-90 million (US$63-$75 million), compared with AUD61.8 million (US$51.6 million) a year before.

However, the increase defied prospects for a decline in earnings from grain handling, with deliveries from farmers who held on to crop post harvest likely to decline from the more than one million tonnes received last year.

"We don't expect to receive similar ex-farm volumes this year, mainly due to reduced export demand resulting from record high world grain stocks and the high value of the Australian dollar during much of 2010," Ian Wilton, the GrainCorp chief executive, said.

The weaker Aussie dollar may boost export activity out of its eastern Australian stronghold before the end of the current financial year in September, he added.