Growing competition among grain exporters is repainting the picture of global wheat trade, Washington has warned, as Kazakhstan sealed a 1.5m-tonne deal with Egypt.

The US Department of Agriculture highlighted exporters' quest "to expand into non-traditional markets" to get shot of huge stocks following two successive years of bumper harvests.

"The world is awash in wheat, and exporters are becoming increasingly competitive," the USDA said, in follow-up comments to last week's estimate revisions which sent Chicago grain prices tumbling.

The department flagged the growing pressure in exports from Russia, where storage capacity which was "far from sufficient or efficient" was adding to incentives to trade.

"Grain elevators in the south of the country, Russia's main 'export plate', are full to the brim as a result of last year's massive intervention," the USDA said.

New kids from the bloc 

However, countries such as Lithuania, another former Soviet bloc state, have also emerged onto the export markets, selling into South East Asia and named as a contender for a huge Saudi wheat tender too.

Also on Monday, Australian grain trader CBH Group said it was looking at selling more wheat into the Middle East, historically a market stronghold for European exporters. 

And Kazakhstan, another former Soviet state, revealed it had agreed a deal to sell up to 1.5m tonnes of grain to Egypt, the world's biggest wheat importer, this year through a deal with trading house Venus International.

The deal – which Venus stated at 1m tonnes in the year from March - comes a week after Kazakh wheat won 60,000 tonnes of a 180,000-tonne Egyptian wheat tender, its first showing since 2008.

Asylzhan Mamytbekov, chairman of Kazakhstan's state grain company KazAgro, added that the country was "actively" seeking further fresh export markets, and "plans to begin grain export to China and the countries of the Pacific region".

Speculators blamed 

US wheat exports, meanwhile, have struggled this year, falling by almost one-third in the July-to-November period last year from the same months in 2008, a decline the USDA said reflected speculative buying.

"US domestic prices remain high enough to weaken export prospects," the department said.

"It appears that high domestic prices are being supported, in part, by investment activity, with buying grains considered a hedge against future inflation."