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 new contracts allow market participants to hedge against the price difference between sorghum and corn, two grains used in animal feed and ethanol production.

The CME noted that while sorghum prices tend to track corn closely over extended periods, geopolitical events and regional supply shifts can disrupt this relationship. John Ricci, managing director and global head of agricultural products at the CME Group, stated: 'In recent years, the sorghum-to-corn cash spread has experienced considerable volatility, swinging from sharp premiums to steep discounts.'

The contracts will be physically delivered through a network of elevators in Kansas, the largest sorghum-producing state. This marks the second time that grain sorghum contracts have been attempted at the CBOT; the first attempt failed to gain traction in the 1970s and was later delisted in 1999.

The new contract is priced directly as a differential to corn futures, allowing market participants to isolate and manage structural risk without exposure to the broader grain complex. The CME noted that localized supply dynamics and geopolitical factors frequently cause significant fluctuations in the cash spread between sorghum and corn.