REFILE-GRAINS-Wheat up for 2nd day on supply woes, Australian weather

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* Wheat up 0.7 pct, builds on Wednesday's gains
* Dryness in United States, Australia raises supply concerns
* Soybeans extend gains, bargain hunting underpins
* Asian shares rise after US data, China GDP

By Naveen Thukral
SINGAPORE, Oct 18 (Reuters) - U.S. wheat rose 0.7 percent on
Thursday, gaining for a second consecutive session as dry
weather in top exporters the United States and Australia renewed
concerns over tightening global supplies.
Soybean futures extended gains, driven by bargain hunting
after prices slid this week to their lowest since late June.
There was additional support for the agricultural markets
with improved risk appetite following positive U.S. housing data
and China's GDP, which showed the world's second biggest economy
was stabilising.
"We have seen general improvement in risk attitude in the
past six to eight hours," said Luke Mathews, commodities
strategist at the Commonwealth Bank of Australia.
"We still have the case in grain and oilseed markets that
despite the seasonal harvest pressure, forecast for inventories
remains very tight."
Chicago Board of Trade December wheat added 0.7
percent to $8.62-1/2 a bushel by 0330 GMT. November soy
rose 0.9 percent to $15.22-1/2 a bushel while December corn
gained 0.4 percent to $7.48-1/2 a bushel.
U.S. wheat futures were underpinned by dryness that posed a
threat to wheat fields in Australia and the United States, the
top two global wheat exporters.
The worst drought in more than 50 years has drawn down soil
moisture reserves in the U.S. Great Plains hard red winter wheat
region and recent showers, while boosting fall seeding
prospects, failed to fully recharge soil moisture levels.
The dry area includes parts of Kansas, the largest U.S.
producer of bread-making quality hard red winter wheat.
In its October crop report, the U.S. Department of
Agriculture (USDA) pegged Australia's wheat exports for the
current 2012/13 marketing year at 18.0 million tonnes, below a
September forecast of 21.0 million.
A Reuters poll of 10 analysts in early October showed
Australia's wheat production at 21.4 million tonnes, down more
than one million tonnes from the government's most recent
estimate of 22.5 million. The poll showed wheat output falling
27 percent from last year's record crop of 29.5 million as dry
weather reduces yields.
"The situation in Western Australia is that crop conditions
have been too dry for grain filling, so we are likely to see
some downgrades in Western Australia wheat production," said
Mathews.
"In addition, we continue to see dryness in the northern
U.S. plains, which is resulting in some concerns about early
plant establishment before the onset of winter."
Britain remained on track on Wednesday to become a net wheat
importer in the 2012/13 season, for the first time in more than
a decade, following a poor harvest this summer, with customs
data showing imports far outstripped exports in August.

Soybeans plunged to a 3-1/2 month low earlier this week from
record highs of nearly $18 per bushel set in early September,
leaving the market vulnerable to an upside correction.
Commodity funds bought 6,000 Chicago Board of Trade corn
contracts on Wednesday, trade sources said. They bought 6,000
soybean contracts and 2,000 wheat contracts.
The brighter tone for risk assets weighed on the U.S.
dollar, making commodities priced in the greenback attractive
for importers.
China's third-quarter gross domestic product grew 7.4
percent from a year earlier, the slowest pace since the first
quarter of 2009 and marking the seventh straight quarter of
slower growth, but matching expectations.
U.S. housing starts surged 15 percent in September, their
fastest pace in more than four years, bolstering sentiment that
had already perked up on a fall in the U.S. jobless rate and
strong retail sales.

Prices at 0330 GMT
Contract Last Change Pct chg MA 30 RSI
CBOT wheat 862.50 6.25 +0.73% 873.16 48
CBOT corn 748.50 3.00 +0.40% 766.86 48
CBOT soy 1522.50 13.25 +0.88% 1581.29 42
CBOT rice $15.16 $0.02 +0.13% $15.47 54
WTI crude $92.16 $0.04 +0.04% $89.05 52
Currencies
Euro/dlr $1.310 $0.081 +6.60%
USD/AUD 1.039 -0.016 -1.54%
Most active contracts
Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
RSI 14, exponential

(Reporting by Naveen Thukral; Editing by Clarence Fernandez)