BEIJING (Dow Jones)--Chinese quarantine authorities have rejected a U.S. cargo of 54,000 metric tons of genetically modified corn of an unacceptable strain, China's largest grain trader, Cofco Ltd., said Tuesday.

However, an industry participant with links to U.S. trade said the cargo remains in "technical limbo," adding that there is a chance China could still accept it after the appropriate clearance is obtained for the strain.

The news didn't have a major impact on corn prices, with the most-actively-traded September corn contract on Dalian Commodity Exchange up less than 0.1%, mostly due to macroeconomic uncertainty.

The rejection is the first after China began buying massive levels of corn this year from the U.S.--now near 1 million tons--due to weather-related shortages and rising domestic demand. It turned net corn importer in June.

The U.S. accounted for 97% of imports in the first 10 months of the year.

"The registration process for the strain is likely to be completed in months, after which the problem will just go away," the person told Dow Jones Newswires. "It's not a serious problem, and no corn has been turned away from China."

The cargo has already been offloaded, he added. The 54,000 tons is just about 4% of total U.S. corn shipments this year.

Registrations for genetically modified corn strains take about two years, and efforts to register this particular strain have been going on "for months, if not years."

Cofco was also the buyer of the cargo that landed in a Shenzhen port in September, the last in a series of U.S. corn shipments this year.

"The vessel will be sent to other destinations that can accept the GM strain, maybe Japan or Malaysia or Indonesia," a senior Cofco executive, who declined to be identified, told Dow Jones Newswires separately.

Zhang Xinyue, a public relations official with the company, said Tuesday that "Cofco strictly observes China's policies."

"We're in discussions (with the sellers) on matters relating to the return of the goods. The liability lies with the sellers."

China accepts 11 of 20 global GM corn strains.

Its corn imports are expected to grow in coming years.