CHICAGO, Aug 27 (Reuters) - A type of genetically

modified wheat developed by Argentina's Bioceres Crop Solutions ( BIOX )

may be safely grown and bred in the United States, the

U.S. Department of Agriculture said on Tuesday.

Bioceres must still complete additional steps, including

field trials, that will take years before it can commercialize

HB4 wheat, modified to tolerate drought, industry group U.S.

Wheat Associates said.

Still, USDA's finding moves genetically modified wheat

closer to production in the U.S. in a potential win for farmers

grappling with drought and more severe weather, despite concerns

among some consumers.

"Wherever wheat is grown in the world, drought takes its

toll on yields and quality, so an innovation like HB4 holds a

lot of interest for growers like me," said Michael Peters, an

Oklahoma wheat farmer and past chairman of U.S. Wheat

Associates.

Genetic modification involves altering a plant's makeup by

transferring DNA from one organism to another and is common in

crops such as corn, used for livestock feed. Some consumer

groups oppose genetic modification of wheat over concerns about

human health since it is widely used to make bread and pasta,

and therefore consumed directly by people.

USDA's decision on HB4 wheat is farther than the agency has

ever gone with genetically modified wheat, U.S. Wheat Associates

said.

Bioceres declined to comment.

The company has said opposition to genetically modified

wheat is easing due to soaring food prices and because GM crops

can survive drought and pests, reducing the risk of famine.

In May, Bioceres said it started sales of genetically

modified wheat seeds in Argentina, the first time the technology

became commercially available to farmers anywhere in the world.

The U.S. Food and Drug Administration concluded a review of

Bioceres' wheat in 2022 without further questions. The FDA

oversees the safety of food from new GM crops before they enter

the market, while the USDA reviews the impact on agriculture and

the environment.

Bioceres also has regulatory approval for food and feed use

in Nigeria, Brazil, Colombia, Indonesia and South Africa, and

farmers are growing HB4 wheat in Argentina and Brazil, according

to U.S. Wheat Associates.

Top buyers of U.S. wheat, including Mexico, the Philippines

and Japan, have not approved it.

Two decades ago, Monsanto Co was working to commercialize

wheat bred to withstand treatments of its weed-killer Roundup,

but the company halted that effort in 2004. International buyers

had threatened to boycott U.S. wheat if the product was

introduced to the marketplace. Bayer AG purchased

Monsanto in 2018.