A federal judge has sided with Bunge Ltd. (BG) in its refusal to buy corn containing one of Syngenta AG's biotech traits, denying a preliminary injunction sought by the Swiss company's seed division, according to a ruling filed this week.

Syngenta sued Bunge last month in U.S. District Court for Northern Iowa, claiming a decision by the grain merchandiser not to accept corn grown with the Agrisure Viptera seed was arbitrary and harmed Syngenta's reputation. The seed has been approved for import into several key markets, but not China.

Federal Judge Mark W. Bennett denied Syngenta's request for the preliminary injunction, writing that, while the seed maker does "face a substantial threat of reputational harm," it isn't clear Bunge is to blame.

"Bunge's decision to reject Viptera corn at all of its locations was a legitimate and reasonable business decision," Bennett wrote in a decision dated Monday.

The judge also said in his decision that "Syngenta has no likelihood of success on the merits of its claims."

Syngenta in a statement said the lawsuit is only part of its efforts to "secure greater clarity" for farmers who use new seed technologies, and its determination on that issue remains unchanged.

Bunge in a statement said it is pleased with the ruling and expects the court to eventually reject Syngenta's suit outright.