The earnings schedule is running very thin this week, with just a handful of notable names on the docket.  One of them is Monsanto (NYSE:MON), the fertilizer and seed giant.  We’re not big fans of the agriculture stocks these days, as most have been pummeled by rising costs and reports of bumper crops.  But we are seeing something in MON that we like — at least for a couple of days.

Monsanto reports earnings Wednesday before the bell, with analysts expecting a loss of 27 cents a share, compared to a loss of 9 cents a year ago.  The company has beaten the past three such estimates, so overcoming the current rock-bottom expectation shouldn’t be a problem. 

Here’s the thing about MON and earnings:  The stock typically is very strong after reporting.  The shares have gained ground after three of the past four reports, averaging a robust 9.1% in the subsequent week. 

The stock is currently bouncing off the $60 level and was one of the few equities to show strength amid Monday’s weak market.  The shares, which were up about 1% on Tuesday to $60.67, are oversold after plummeting as much as 23% from their July high.  The $60 level provided some support last November and December, so there is some precedent for the importance of this level.

Sentiment toward MON is mixed.  Short interest is negligible, while two-thirds of covering analysts rate the stock a buy.  That seems a bit high given the stock’s recent performance,  but the put/call ratio is coming off a peak, indicating that some pessimism could be unwinding into buying pressure.

We know that agriculture stocks, including MON, have been major underperformers over the past couple of months.  The sector has been beset by high corn yields and high input costs for fertilizers.  But a lot of that negativity has clearly been priced into these stocks.

We’re not telling you to go run out and buy a bunch of MON shares as a cornerstone of your portfolio.  But we are saying that the stock appears poised for a bounce after being sold off.  And earnings could just be the catalyst, given the low expectations for the company this quarter and the recent post-earnings price performance.  Buy the October 60 call for $3.50 or less.