New contract aims to help growers manage sorghum and corn price gaps
CME Group has announced plans to launch Sorghum Basis Futures, with trading expected to begin on August 24, 2026, subject to regulatory approval.
Sorghum is an important grain used in livestock feed, export markets, and biofuel production. Because sorghum and corn are often used for similar purposes, their prices tend to move together. However, market conditions, trade activity, and supply changes can sometimes create large differences in value between the two crops.
The new futures contract is designed to help farmers, grain handlers, exporters, and other market participants manage this price relationship more effectively. The contract will track the basis between sorghum and corn, allowing users to hedge against market swings that affect profitability.
According to CME Group, sorghum can trade at either a premium or a discount compared to corn. A higher sorghum price often reflects strong international demand, while lower prices may encourage domestic feed users to include more sorghum in livestock rations.
Industry officials say recent years have seen significant volatility in the cash spread between sorghum and corn. The new contract is intended to provide a more precise risk-management tool for businesses exposed to these market movements.
The futures contracts will be physically delivered through a network of grain elevators in Kansas, the leading sorghum-producing state in the United States. Grain deliveries may be made by truck or rail using the established Kansas City Hard Red Winter Wheat delivery system.
"While sorghum prices tend to track corn closely over extended macroeconomic cycles, geopolitical events and regional supply shifts can disrupt that relationship," said John Ricci, Managing Director and Global Head of Agricultural Products, CME Group.
He added, "In recent years, the sorghum-to-corn cash spread has experienced considerable volatility, swinging from sharp premiums to steep discounts. The Sorghum futures contract will provide market participants a precise instrument to hedge that basis risk."
The launch comes as CME Group continues to see strong activity in agricultural markets. The company reported record quarterly agricultural trading volumes of 2.1 million contracts during the second quarter of 2026.
Corn futures and options also reached record open interest levels of 4.1 million contracts during the same period, highlighting continued interest in grain risk-management tools.
The proposed Sorghum Basis Futures contract is expected to provide greater pricing transparency and expanded marketing opportunities for participants across the agricultural supply chain.
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