Despite mixed weather conditions in the country, Graincorp Ltd (ASX: GNC) has emerged as a top pick in Macquarie's latest agriculture sector review.

The broker is bullish with a $9.00 price target (GrainCorp shares are currently trading at $7.78) and a preferred pick over Nufarm Ltd (ASX: NUF) and Elders Ltd (ASX: ELD).

So what makes GrainCorp the standout?

Strong earnings and exports

GrainCorp just delivered a first-half result that was well ahead of expectations, with EBITDA of $202 million. The business upgraded its full-year guidance and is now expecting full-year underlying EBITDA of $305 million at the mid-point, supported by strength in its diversified commodity trading book and feed business.

Planting is off to a good start for the 2025/26 winter crop, which Macquarie forecasts will boost GrainCorp's grain export division.

Whilst GrainCorp is beating and raising its guidance, Nufarm missed its guidance, partly due to lower fish oil pricing in its Omega 3 business. Elders also reported sales and earnings that were below expectations.

With the business performing well, GrainCorp has been aggressively buying back its own shares, thereby lowering the share count (and boosting EPS).

Balance sheet strength matters

In agriculture, as in many businesses, a fortress balance sheet is a major asset that can be useful to weather storms and dry patches. GrainCorp is sitting on a core net cash position of $296m, giving it flexibility for dividends, buybacks, and reinvestment.

Compare that to Nufarm, which is battling a 4.5x leverage ratio, amid ongoing earnings pressure from its Omega 3 business.

As for Elders, the business is recovering, but dry conditions in VIC and SA are weighing on sales, and the company is still digesting its Delta Ag acquisition. The balance sheet is a bit stretched, and while livestock demand is strong, margins are under pressure.

Cyclicality is still a risk

It's not all smooth sailing for GrainCorp. The company remains susceptible to volatility in global commodities as well as adverse weather conditions.

So far, GrainCorp has offset some of this pressure, making the most of opportunities in other commodities like chickpeas and canola exports.

That flexibility and GNC's network scale is part of the reason Macquarie sees diversification as a competitive advantage for GrainCorp.

Foolish bottom line

GrainCorp isn't glamorous, but in the world of Australian agriculture shares, Macquarie see's it as among the best in the paddock. Solid operational performance, strong exports, a pristine balance sheet, and a shareholder-friendly capital strategy make it Macquarie's top pick.

It's a reminder that in cyclical sectors like agriculture, balance sheet strength and earnings diversification matter, especially when the weather doesn't always cooperate.