Farmers Sue Over Sell Order on Soybeans

Family farmers who say they suffered severe financial losses from a Chicago Board of Trade order last summer filed a federal class-action lawsuit Tuesday, accusing the exchange of illegally manipulating soybean prices.

The lawsuit seeking more than $100 million in damages was filed by individual farmers from leading soybean-producing states and the American Agriculture Movement, a lobbying group that represents small farmers and rural business people in 34 states.

The Board of Trade denied the allegations, which stem from its emergency action July 11 ordering traders to reduce their holdings in soybean futures contracts.

The order caused a 20% drop in soybean prices and corresponding declines in other commodities, the AAM said.

The board’s move was widely viewed as an effort to break up an alleged attempt to corner the market by Ferruzzi Finanziaria SpA, an Italian company and one of the world’s largest soybean processors.

“The CBOT’s order was a bad faith and self-serving action initiated by the CBOT’s dominant grain merchants and futures traders to create profits for their accounts and for their clients,” said Harvey Joe Sanner, AAM’s president and an Arkansas soybean farmer.

Sanner spoke at news conference at a downtown hotel, accompanied by about 25 other farmers from Illinois, Iowa, Missouri, Indiana, Minnesota, Ohio, Nebraska, Arkansas, Kansas and South Dakota--many of whom said they had been devastated by the board action.

“I’m angry as hell about what has been done to we as producers of this nation,” said Corky Jones, a soybean farmer from Brownville, Neb., and an AAM member.

Jones said the order caused U.S. farmers “in excess of a $50 billion loss on corn and about $27 billion in beans.”

The lawsuit names as defendants the exchange, BOT Chairman Karsten Mahlmann and 21 other directors, and with five other exchange officials.