CME Group Launches MILO Contract for Sorghum Price Risk Management

Sorghum producers now have a tool to manage price-risk exposure thanks to a new futures contract. The MILO contract, launched by CME Group on August 24, specifically targets the price relationship between sorghum and corn.

According to Texas A&M AgriLife Extension economist Yuri Calil, the MILO contract prices the sorghum-corn differential. This is crucial because sorghum prices generally follow corn but can swing sharply in terms of their spread. Since 1989, sorghum has traded at a $1.72 discount to a $1.47 premium relative to corn.

The new contract will allow producers to hedge against sorghum weakening relative to corn. Export demand is a major influence on the spread between sorghum and corn prices. The USDA projects that exports will account for about 55% of combined domestic use and exports in 2026/2027, underscoring the importance of foreign demand to sorghum pricing.