CME Launches Sorghum Basis Futures Contracts on CBOT

The Chicago Mercantile Exchange (CME) Group has launched sorghum basis futures contracts on the Chicago Board of Trade (CBOT), effective August 24, 2026. These contracts allow market participants to hedge against basis risk by tracking the price difference between sorghum and corn. According to John Ricci, managing director and global head of agricultural products at CME Group, 'While sorghum prices tend to track corn closely over extended macroeconomic cycles, geopolitical events and regional supply shifts can disrupt that relationship.' The new contracts will be physically delivered from a network of elevators in Kansas, the largest sorghum-producing state. This move is significant as it provides market participants with a precise instrument to manage basis risk.

The CME Group noted that although sorghum correlates with corn over long horizons, localized supply dynamics and geopolitical factors frequently cause the cash spread between the two grains to fluctuate significantly. The new 5,000-bushel sorghum basis contract allows market participants to isolate and manage this specific structural risk, bypassing flat-price liquidity hurdles.