News: GNC UPDATE 1-Australia's GrainCorp expects loss for year as severe drought bites

(Adds impact to earnings, CEO comment, background)

Aug 2 (Reuters) - GrainCorp Ltd (GNC) said on Friday it expects to report an underlying net loss for the year, as it wrestles with a severe drought that has battered earnings at one of the world's top exporters of commodities such as wheat.

"This is an extremely difficult year for GrainCorp due to the significant disruptions we've seen in global grain markets, compounded by the drought in eastern Australia," Chief Executive Officer Mark Palmquist said in a statement.

The bulk grain handler expects to report underlying core earnings for the 2019 full year in the range of A$65 million to A$85 million ($44.2 million to $57.8 million) and an underlying net loss after tax in the range of A$70 million to A$90 million.

GrainCorp said new crop trading opportunities in the fourth quarter are no longer expected to materialise, owing to reluctance by international market participants to consider new season contracts.

Independent crop forecasters are predicting another below-average production year in Australia in 2019/20.

The impact to core earnings for the year arising from the disruption to grain trade flows would rise to A$60 million to A$70 million, from the A$40 million it had flagged in April, the company said.

The company added, however, that trading conditions for the remainder of its business, including malt, are tracking in line with expectations.

Severe dry weather has threatened grain production across Australia's east coast, where GrainCorp derives nearly all its income. The company in May swung to a loss for the half-year and also scrapped its dividend. ($1 = 1.4704 Australian dollars)

($1 = 1.4697 Australian dollars)