News: GNC UPDATE 1-Australia's GrainCorp hikes FY18 earnings outlook on strong grain trading

(Adds CEO quote, underlying core earnings outlook, background)

Sept 6 (Reuters) - GrainCorp Ltd (GNC) , Australia's biggest listed bulk grain handler, on Thursday raised its full year underlying net profit and underlying core earnings outlook, helped by a strong performance from its international grain trading book and global malt business.

The firm said in a statement it now expects underlying net profit of A$60 million to A$75 million ($43 million to $54 million) for the year to end-September 2018, above the A$50 million to A$70 million range it re-confirmed in May.

GrainCorp also said it expects full year underlying core earnings of A$255 million to A$270 million, up from prior expectations of A$240 million to A$265 million.

Despite the improvement, GrainCorp said its grains business has experienced "ongoing challenging operating conditions" in eastern Australia.

"We expect a considerable decline in grain production in eastern Australia in FY19 with production again skewed to Victoria and southern New South Wales," Managing Director and Chief Executive Mark Palmquist said.

A drought across Australia's east coast has intensified after near record-low levels of rain across much of the region over the past five months, the country's weather bureau said on Wednesday. ($1 = 1.3906 Australian dollars)