CME Group Inc (CME.US), the world's largest derivatives exchange, announced on July 29th its plan to introduce sorghum basis futures, with a target launch date of August 24, 2026, pending regulatory approval.

Sorghum is a versatile commodity serving the U.S. domestic feed industry, international export markets, and the growing biofuel sector. The new basis contract will reflect the price difference between sorghum and corn, as both grains are used for animal feed and ethanol production. A premium for sorghum over corn typically indicates strong international demand driving prices up, while a significant discount encourages U.S. buyers to adjust feed formulas to include cheaper sorghum.

Where to Start

John Ricci, Managing Director and Global Head of Agricultural Products at CME Group, stated, "While sorghum prices have historically followed corn closely over longer economic cycles, geopolitical conflicts and regional supply shifts can disrupt this relationship. In recent years, the spot price spread between sorghum and corn has been highly volatile, swinging from large premiums to deep discounts. This sorghum basis futures contract will provide market participants with a precise tool to hedge that basis risk."

Why Focus on Just One New Contract?

The contract will be physically settled, leveraging the established Kansas City hard red winter wheat delivery system. Delivery will occur at grain elevators in Kansas, the top U.S. sorghum-producing state, via truck or rail. In the second quarter of 2026, CME Group's agricultural products trading volume reached a record 2.1 million contracts. Notably, corn futures and options open interest hit a record 4.1 million contracts, with average daily volume of 695,000 contracts for the quarter, the second-highest on record.