Deere & Co said it was preparing to exploit Russia's plans to develop as a grain superpower as the US machinery giant announced it was to make tractors near Moscow.

The group said it planned further expansion in Russia "as government policies and market conditions allow" as it unveiled board approval for a plant making flagship John Deere products, in addition to the seeding equipment it already makes in-country.

The move, which follows a series of cutbacks in Deere's North American plants, comes a month after Samuel Allen stressed investment in Russia in one of his first pronouncements since being named Deere chief executive.

Moscow plans to raise grain production to 135m tonnes within 10-15 years from about 90m forecast for this year.

'Vision for expansion' 

"Russia will be a major contributor to meeting the world's future needs for food and forestry products," Mr Allen said.

In a report to investors on Monday, Deere pegged arable land in the former Soviet states of Belarus, Kazakhstan, Russia and Ukraine at 182.2m hectares, compared with 170.4 hectares in Russia.

Deere & Co shares stood $1.30 lower $43.13 in afternoon trade in New York, on a weak day for stocks.