BASF SE, the world's biggest chemical company, will expand cooperation with Monsanto Co. to include genetically modified wheat as farmers in North and South America turn to crops resistant to drought and bugs.

The first yield-enhanced wheat will be introduced to market after 2020, with so-called stress-tolerant varieties available later. The companies will spend as much as $1 billion on developing seeds with at least 10 percent higher yields, said Peter Eckes, president of BASF's plant science unit.

BASF and Creve Coeur-based Monsanto are pumping $2.5 billion into jointly developing gene-modified crops. The two companies are already working on higher-yielding and stress-tolerant corn, soybean, canola and cotton plants, with the first drought-tolerant corn expected to be available in North America from 2012.

"We don't want to become a seed company," Eckes said in a phone interview. "We want to identify genes that can enhance yield."

The pipeline of joint projects has a market value of more than $2 billion, BASF has said. Eckes declined to specify how much more value the wheat cooperation may bring.

The German chemical company may also look for a partner to develop technology-based rice, Eckes said. Last year, BASF and the Brazilian Centro de Tecnologia Canavieira agreed to jointly develop drought-tolerant sugarcane varieties with 25 percent higher yield, with the first varieties scheduled to be launched in about 10 years.