Chemicals and seed giant DuPont is also a founding investor in the joint venture, which plans to debut its first nine virtual trading "pits" within 90 days, the companies said in a statement. Financial terms were not disclosed.

Internet-related agriculture sites for farmers have sprouted by the dozens with the growth of the Web. But the multibillion dollar world of grain merchandising has largely remained private and secretive. So news of the willingness of some of the biggest traders to endorse online transactions gave the grain industry a jolt.

"This deals with antitrust issues, trade and global issues..it crosses all these borders," said Mr Tim Cansler, the American Farm Bureau Federation's director of government relations. "I'd be surprised if any farm group had a concrete position on this."

Mr Cansler said the progression toward virtual markets would probably make trade between buyers and sellers more efficient. As for traditional markets like the Chicago Board of Trade, Mr Cansler said, "They have got to be thinking about this."

A CBOT spokesman said the Board would study the news. The venture, at http://www.pradium.com, is not a futures exchange. It will feature an automated "matching engine" for the complex bids and offers of grain trade, which can call for a dozen or more specifications for each transaction - grades, shipping dates, locations, proteins, truck, rail and so on.

The business-to-business venture is aimed initially at US country elevators, processors, feedlots, exporters and pet food and feed manufacturers, Pradium said.

"Our goal is to dramatically increase the efficiencies and cost effectiveness of the grain business and contribute to a better bottom line for all exchange participants," said Mr Rhem Wooten, Pradium president and chief executive officer.

Pradium may raise concerns about corporate power in agriculture. ADM, Cargill and Cenex already own more than 1.2 billion bushels of grain storage in the United States, about 15 percent of total off-farm grain storage.

ADM and Cargill are the top two grain handlers, Cenex is the third-largest farmer owned cooperative, and Louis Dreyfus is among the top five grain exporters.

But the venture, with an initial US focus, will compete with a number of online US grain marketing Web sites such as www.icecorp.com, www.emarkets.com and www.cybercrop.com, and with the existing cash "telephone" market among grain traders.

Pradium said it will operate independently and has been designed by the founders to build industry-wide participation. "It's a separate company," Mr Wooten said. "We absolutely must operate a neutral and transparent site with absolute integrity. If we don't, we'll fail. That won't be because regulators intervene. It's because customers won't participate."

Pradium's bid, ask and traded prices will be available to all exchange members. Grain prices will be quoted in the customary way as a "basis" bid, a differential against futures at the Chicago Board of Trade and other markets.

Trading rules will be those already mandated by US grain industry associations. "Pradium will not pre-screen potential customers," said Pradium's Joe Braker, senior vice president of operations. "It's an open marketplace available to all participants who wish to subscribe." Pradium's leaders also include Daniel Amstutz, former US Agriculture Department under secretary in the Reagan Administration, who will chair the board of directors.

"Pradium will bring the cash commodity marketplace to desktops," Mr Amstutz said in a statement. "By combining in-depth market information such as news, weather, quotes and expert commentary with dynamic order matching and unparalleled market reach, buyers and sellers will have the tools they need to be more productive and competitive in one location."

Initial trading "pits" for Pradium's matching engine include corn, soyabeans and the livestock feed ingredients: wheat middlings, soybean hulls, corn gluten feed and meal, meat and bone meal, corn hominy and distillers dried grains. Plans on the drawing board include trading in wheat, soyabean meal, oats, sorghum, barley, rice and crude vegetable oil.

"Industry participants of all sizes will benefit from this service," Braker said. Pradium is a derivative of the Latin word "praedium," meaning"from the farm."

Officials said the venture, under development from offices in Minneapoils since the first quarter of this year, will be moving its offices to the Annapolis, Maryland, area soon.

(Reuters)