CME Launches Sorghum Basis Futures to Tame Volatile Price Gaps

CME Group is launching Sorghum Basis Futures, a new contract aimed at helping growers manage price gaps between sorghum and corn.

The contract will track the basis between sorghum and corn, allowing users to hedge against market swings that affect profitability.

Sorghum can trade at either a premium or a discount compared to corn, reflecting strong international demand or domestic feed usage.

CME Group said recent years have seen significant volatility in the cash spread between sorghum and corn, and the new contract is intended to provide a more precise risk-management tool for businesses exposed to these market movements.