US farm officials eased fears of curbs on Russian grain exports, concerns which boosted wheat prices, by forecasting that shipments would slow to stay within a government ceiling without the need for restrictions.

Wheat prices in early deals on Wednesday added to gains in the last session of more than 2%, on both sides of the Atlantic, fuelled by rumours that Russia was poised, for a second successive season, to restrict grain shipments.

The speculation followed a warning by Sovecon, the influential analysis group, to Agrimoney.com on Monday that Russian shipment for 2011-12 were running fast enough to run into a limit of 23m-25m tonnes, at which point the government has threatened export curbs to protect domestic supplies.

However, the US Department of Agriculture's Moscow bureau said that the pace of shipments would slow of its own accord from the breakneck 14.8m tonnes reached in the July-to-December period.

"Despite this very fast pace, there will be a dramatic slowdown in exports during the second half of the marketing year, January-June," the bureau said, forecasting that shipments would not exceed 24m tonnes.

'Export potential largely finished'

The forecast was based in part on the greater struggle that merchants are having finding competitively-priced wheat, after exhausting supplies near to Russia's Black Sea ports, the country's main grain export facilities.

"Industry analysts report that the export potential of the three major southern provinces has largely finished, and exports from these provinces will be almost non-existent for the rest of the year," the bureau said in a report.

Meanwhile transporting grain to port from interior regions such as Siberia "still remains unprofitable despite the low price of wheat in these provinces".

Cold weather also poses a hurdle to shipments too, meaning that "even if sufficient grain was available, due to harsh weather and freezing Russian ports must work far below capacity during the winter".

Furthermore, the competitiveness of Russian grain is being undermined by "strong" domestic demand, from dairy, pig and poultry industries.

'Not as competitively priced'

Indeed, in Minneapolis, Benson Quinn Commodities analyst Brian Henry noted that Russian wheat supplies, whose low prices earned them a succession of tender victories early in 2011-12, "are not as competitively priced as they once were".

And he echoed the observation that, "the weather in the Black Sea region is turning much more seasonal with cold temperatures likely limiting the movement of grain".

While failing to rule out the potential for officials to introduce curbs, "for now I expect the market to do the work for them", Mr Henry said.

Chicago wheat for March stood 0.4% higher at $6.35 ¾ a bushel at 08:45 GMT, adding to gains of 2.2% in the last session.