U.S. foes cast aside politics to buy grains

CHICAGO (Reuters) - Iran may be dueling with Washington over its nuclear ambitions, but when the country desperately needed corn last month, it turned to the United States.

Venezuelan President Hugo Chavez has made no secret of his disdain for U.S. President George W. Bush, calling him a donkey and even Satan, but when millers in Caracas need wheat to make bread, they go shopping for American supplies.

Nations like Iran, Venezuela, Syria and Cuba have icy diplomatic ties with Washington but they do not let politics stand in the way of importing competitively-priced food or feed ingredients from the United States.

The world's largest exporter of corn, soybeans and wheat, the United States ships its agricultural commodities across the globe, to friends and foes from Spain to Iraq to Sudan.

"They want to make sure they feed their people. They don't want to screw with that. Politics is politics," said veteran grains analyst Don Roose of brokerage U.S. Commodities.

"They know they are buying from people they don't like, but they don't want a revolt because they can't feed the people," he said, adding that tight global supplies of wheat was also pushing some countries to buy from the United States.

U.S. and European wheat prices hit all-time highs amid production woes in Canada, Australia and Europe that have helped cut global wheat stocks to the smallest in 30 years.

The United States is considered the residual supplier of grains to the world -- the country importers can turn to after rival exporters have cleared their storage bins.

Iran, which has a long-running feud with the United States over its nuclear program, last month bought 360,000 metric tons of U.S. corn worth about $60 million at Thursday's prices.

It was the first time Iran, which faces a U.S.-led move to broaden U.N. sanctions for its refusal to suspend nuclear activity, had bought U.S. corn in almost three years.

Traders said Tehran turned to the United States because its traditional supplier Brazil was running low on corn due to strong demand from Europe.

BREAD BASKET OF THE WORLD

"The United States is the bread basket of the world, and the U.S. is never going to deny these countries the food their people need," said grains analyst Joe Victor of Allendale Inc.

"The people who are eating these foods will say 'hey, this is from the United States'. It will help to smooth things over and it is also a public relations measure," he added.

Oil-rich Venezuela has purchased 402,400 metric tons of wheat from the United States since June 1 -- the start of the marketing year -- including 50,700 metric tons last week. The total value is an estimated $100 million at Thursday's prices.

The country also bought 547,200 metric tons of corn from the United States in the marketing year ended August 31. So far this season, Venezuela has purchased 28,000 metric tons of corn.

Syria, labeled by Bush in 2002 as being part of the 'axis of evil' with North Korea and Iraq, before its occupation by U.S. troops, bought 1.46 million metric tons of corn in the marketing year ended August 31. At Thursday's prices, the sales are valued at an estimated $242 million.

Despite attempts by the United States to isolate Syria for meddling in Iraq and Lebanon, it also purchased 249,500 metric tons of soybeans in the 2006/07 marketing year that ended August 31.

China, which has testy ties with the United States and is often criticized by Washington over its human rights record and currency policy, is the largest buyer of U.S. soybeans.

The election of old U.S. Cold War enemy, former Marxist guerrilla Daniel Ortega as president of Nicaragua in January and has not stopped the country from buying U.S. corn.

Nicaragua has purchased 40,100 metric tons of corn since the 2007/08 marketing year began on September1. It bought 131,400 metric tons of corn in the previous season.

Cuba, slapped with U.S. restrictions on trade and travel, is a regular buyer of wheat and corn from the United States.

"It would be ridiculous for Cuba not to buy from the United States, it's just miles away," Allendale's Victor said.