WASHINGTON, Aug. 21 (Xinhua) -- Iran this summer resumed buying U.S. wheat after a 27-year hiatus, a sign of the limited options for importers seeking large quantities of high-quality grain, The Wall Street Journal reported on Thursday.

    Since the 2008-09 marketing year began on June 1, Iran has bought more than 1 million tons of hard red winter wheat directly from the U.S., which is "a very large amount," the report quoted Bill Nelson, analyst for Wachovia Securities as saying.

    The purchases mean at least 3 percent to 4 percent of domestic wheat exports for the marketing year will go to a country the U.S. hasn't done business with for more than a generation, said the report.

    Government sanctions don't prohibit U.S. agricultural exporters from doing business with Iran.

    Drought is expected to slash Iran's domestic production by one-third this year.

    Iran is forecast to produce 10 million tons of wheat this year, down from 15 million tons in 2007-08, and to import 4.5 million tons, up from 200,000 tons last year, according to the U.S. Department of Agriculture.