Japan, South Korea and Taiwan Thursday stepped up purchases of wheat, buying around 220,000 metric tons, almost all from the U.S., in a series of tenders amid concerns that prices may move higher in the second half of the year due to a fall in production in Australia, Europe and the Black Sea region.

Usually buyers in Asia avoid making tender-based purchases on the same day, so that they get better price ideas from each other's deals and to prevent a pushing up of cash market rates.

But cash market buying activity was strong Thursday as buyers snapped up cargoes to cover their requirements for July-September shipments.

Australia on Wednesday lowered its output forecast for the next harvest, due from October, by 6.2% to 24.1 million tons, an 18% drop from the previous year's record high.

The London-based International Grains Council has forecast exports from Russia and Ukraine to fall 21% and 26% to 17 million and 4 million tons, respectively, in the next marketing year that begins July 1.

The European Union's wheat exports are likely to fall 15.5% in 2012-13 to 14.2 million tons because of lower production, the IGC said.

Many buyers have a strong preference for particular grades of high-quality wheat, and if production is lower elsewhere, U.S. prices and exports will move higher, said an agricultural commodities analyst with a Singapore-based commodities brokerage.

The July spring wheat futures contract on the Minneapolis Grain Exchange, a benchmark for high-quality grades, is trading around $7.7350 a bushel, up 4% from $7.44 a week earlier.

A trader in Jakarta said there are several buying inquiries from millers for third quarter shipments, which could be in anticipation of a further rise in prices.

Even if India firms up its plans to sell wheat from government stockpiles, there is a captive market for high-quality U.S. and Australian milling grade wheat in the region that will remain intact, said an importer in Seoul.

The Taiwan Flour Millers' Association purchased 47,050 tons of U.S. wheat from Hamburg-based commodities trader Alfred C. Toepfer International for shipment between July 31 and Aug. 14, trading executives said.

The association bought Dark Northern Spring at 333.94 U.S. dollars a ton, free on board, and Hard Red Winter at $301.35/ton, also FOB, they said.

After adding freight costs, the grades cost $361.88 and $329.29, respectively.

The freight was contracted separately at $27.94/ton, compared with $27.88/ton in a June 7 tender.

The association's import prices for high-quality milling wheat are widely considered a benchmark in the Asian grain trade, even though it buys relatively small volumes.

A consortium of three South Korean flour mills also bought U.S.-origin wheat in three grades from Toepfer, but their purchase cost was lower compared with Taiwan's because of lesser protein values.