Monsanto (NYSE:MON) reported its latest results today, and the agricultural biotechnology outfit pulled off a respectable, if not spectacular, fiscal first quarter. While recent earnings failed to dazzle, the company may have an opportunity to exploit the ongoing strong demand for corn.

Monsanto posted $1.5 billion in net sales for the quarter, up 9.5% versus the same period in fiscal 2006, while net income arrived at $0.16 per share, up from $0.11. The improvement in the bottom line, though, isn't all that it seems. Monsanto benefited from a significantly lower effective tax rate in this year's fiscal first quarter; operating income actually fell slightly year over year.

An analysis of this quarter's revenue, though, suggests that Monsanto could position itself for fatter operating earnings in the future. A major driver in the quarter was corn seeds and traits, which saw sales jump 35% year over year, even as sales of other seeds and traits declined. One of the main reasons for the powerful growth in the corn segment was growing demand for the crop from ethanol producers like ADM (NYSE:ADM). Due to this demand, corn prices surged 81% in 2006, achieving a 10-year high, according to Bloomberg.

Higher returns from corn harvests may provide an opportunity for Monsanto to raise prices for its genetically modified seeds. With corn farmers flush with cash from dramatically higher prices, and elevated prices forecast for 2007, farmers might not mind paying a bit more for seeds. Granted, Monsanto can't make prices too steep as it faces competition from companies like Syngenta (NYSE:SYT). But with a growing share of the U.S. corn market thanks to recent micro-purchases and clear leadership in traits that protect corn crops from potentially devastating pests, Monsanto might have some room to maneuver on seed price.

Unfortunately, Monsanto's pending merger with Delta & Pine Land (NYSE:DLP) is expected to be a drag on results in the near term. However, Monsanto could offset this drag with higher corn seed prices.

For more on Monsanto, take a look at "Monsanto Needs to Charm."

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Fool contributor Brian Gorman does not own shares in any of the companies mentioned.