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Small victory for soybean farmers

by Robert Schubert
CropChoice editor

(June 21, 2002 -- CropChoice news) -- A Federal District Court judge in Chicago dealt a blow to the Chicago Board of Trade and new hope to a group of soybean farmers who in 1989 sued the trade entity. The judge denied the Board of Trade's final motion for dismissal and set a court date of September 9, 2002 for a jury trial, something the Board's lawyers had been working for 13 years to avoid.

"Hallelujah! We have a trial date," says Harvey Joe Sanner, a soybean grower from Des Arc, Ark. "It's a classic David and Goliath story of modern times. The Biblical David was luckier than soybean farmers because Goliath was dumber and easier to bring to justice than the CBOT."

Sanner is one of the plaintiffs who alleged that the Board of Trade conspired to manipulate the soybean market, a violation of the Sherman Anti Trust Act. The saga began on July 11, 1989 when the Board issued its Emergency Resolution that sent soybean prices plummeting. A drought in 1988 had reduced stocks and farmers were expecting higher market prices for their 1989 production. That optimism evaporated when the Board publicly mandated that large contracts to purchase soybeans be liquidated, thereby forcing buyers from the market and creating a windfall for the short sellers.

"The evidence amassed during the discovery process is damning to the CBOT's 1989 action, I guess that explains why they fought so hard to suppress it," Sanner says. "The CBOT engaged in a massive public relations campaign to try and convince farm organizations, congressional committees and regulatory agencies that they were not guilty of market manipulation. Now a jury will decide what is truth and what is fiction."

Throughout the case, the Board of Trade has argued that its 1989 order was justified and had no impact on the market or on farmers.

"We are aware of the judge's ruling and we believe that when all is said and done, the court will rule in favor of our arguments and our longstanding position will be validated," says David P. Prosperi, senior vice president and assistant to the president of the Chicago Board of Trade.

Sanner recalls that at one point, the Board argued in court that it had no influence on the cash market.

"If I go to any elevator to sell beans, I'll get a quoted a cash price based on the futures price in Chicago," he says.

Of the CBOT's action, Sanner wonders: "Why in God's name did you let the suit go forward for 13 years if you believed so strongly in your case? Instead, you prevented farmers from having their evidence heard."