CME Launches Sorghum Basis Futures Contracts on CBOT

The Chicago Mercantile Exchange (CME) has launched sorghum basis futures contracts on the Chicago Board of Trade (CBOT), effective August 24, 2026. The new contract is designed to help market participants manage basis risk between sorghum and corn, two types of grain used in animal feed and ethanol production.

The CME noted that while sorghum prices tend to track corn closely over extended macroeconomic cycles, geopolitical events and regional supply shifts can disrupt this relationship. The sorghum-to-corn cash spread has experienced considerable volatility in recent years, swinging from sharp premiums to steep discounts.

John Ricci, managing director and global head of agricultural products at the CME Group, said that the new contract will provide market participants with a precise instrument to hedge basis risk. The contracts will be physically delivered through a network of elevators in Kansas, the nation's largest sorghum-producing state.

The launch of the sorghum basis futures contract is seen as an effort to address liquidity issues and provide a more efficient way for market participants to manage basis risk. This move comes after previous attempts at trading grain sorghum contracts on the CBOT and Kansas City Board of Trade (KCBT) failed to gain traction in the 1970s and 1990s, respectively.