U.S. grain giant Archer Daniels Midland Co. (ADM) has moved closer to gaining control of a Brazilian agricultural cooperative Cooagri, reported local financial newspaper Valor Economico Monday.

The controlling associates of Cooagri on Friday agreed to allow ADM to lease Cooagri's 18 units in Mato Grosso do Sul state for five years, with an option to purchase the cooperative in two years, the newspaper reported. The cooperative's members still need to approve the deal.

ADM sees the potential to hike Cooagri's corn and soy storage capacity by 50% from its current one million tons, a person close to the deal recently told Dow Jones Newswires.

ADM should pump 10 million Brazilian real ($4.4 million) into cash-strapped Cooagri, the newspaper reported. ADM wasn't available for further comment.

Brazil is the world's No. 2 soy producer after the U.S.

-By Tony Danby, Dow Jones Newswires; 55-11-2847-4523; brazil@dowjones.com