NEW YORK - Monsanto Co, the world's biggest seed company, forecast fiscal 2010 earnings below Wall Street estimates, due in part to a glut of herbicide supply, sending its shares down 6 percent.

The St. Louis-based company said on Thursday it expects ongoing earnings per share of $3.10 to $3.30 for the current fiscal year, which began Sept. 1.

Analysts' average forecast is $4.10 per share, excluding one-time items, according to Reuters Estimates.

Shares of Monsanto fell $4.98 to $79.50 in morning trading on the New York Stock Exchange.

Monsanto's chief financial officer, Carl Casale, disclosed the company's earnings forecast in remarks prepared for a conference in London. He also reported near-term supply/demand imbalance in the chemical side of agriculture.

Greenwich Consultants analyst Mike Judd told Reuters the forecast wasn't surprising due in part to a drop in profits from a phosphate rock mine,

Monsanto owns a phosphate rock mine from which it reaped about $2 billion in gross profit in 2008 and $1.8 billion in 2009, he said.

Demand for the mineral, which is used to make the fertilizer diammonium phosphate, has dropped sharply in the past year. The drop has been so sharp that Monsanto now expects 2010 profit from the mine of about $700 million, said Judd, who has a sell rating on the stock.

Earlier this year Monsanto warned of stiff competition in the glyphosate-based herbicide arena, where the company's Roundup herbicide has long been a favorite of farmers.

Monsanto also said on Thursday that it would increase its restructuring reserve to between $550 million and $600 million after identifying additional cost-saving measures.

Most of this reserve will affect its fiscal year 2009, it said, adding it expects the restructuring to reduce future costs by $220 million to $250 million annually.

In June the company, which has been hurt by tougher competition in the herbicide business, said it would cut 900 jobs.

The change in outlook comes one day before the U.S. Agriculture Department updates its forecasts for the coming harvest. Based on good weather the last month as crops mature, analysts expect the department to raise its already record forecast for soybean production and also push up corn output near a record.

Chicago Board of Trade futures prices for soy hit a five-month low last week and corn an eight-month low as crop prospects improved.

The Agriculture Department has already projected farm-gate prices for soybeans next year would average $8.40-$10.40 a bushel, from $10 this season, and corn $3.10-3.90 next season, from $4.00-4.10. Those estimates may ease further in Friday's USDA report. (Reporting by Ernest Scheyder in New York, Ajay Kamalakaran in Bangalore and Brad Dorfman in Chicago; Editing by Greg Mahlich, John Wallace, Dave Zimmerman)