CME Group to launch sorghum basis futures for feed, export and biofuel markets

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CME sorghum basis futures launch

Highlights

CME Group will launch physically delivered sorghum basis futures, letting traders hedge price risk between sorghum and corn using the Kansas delivery network.
The new contract targets exporters, livestock feed users, and biofuel participants, enabling more precise hedging of sorghum-to-corn cash spread volatility.
CME Group reported record agricultural quarterly volume of 2.1 million contracts in Q2 2026 and record corn open interest of 4.1 million contracts.

Contract launch and market purpose

As announced by CME Group, the new contract is designed to reflect the price difference between sorghum and corn, two grains used in animal feed and as ethanol feedstock. The company says the basis contract is meant to help market participants manage volatility in the sorghum-to-corn cash spread.

John Ricci, managing director and global head of agricultural products at CME Group, says sorghum prices tend to track corn over longer macroeconomic cycles, but geopolitical events and regional supply changes can disrupt that relationship. He says the new futures contract gives traders and commercial users a more precise instrument to hedge that basis risk when premiums or discounts shift sharply.

The contracts are to be physically delivered, with grain loaded by truck or rail from a network of elevators in Kansas, the largest sorghum-producing state in the U.S. CME Group says the contract will use the existing Kansas City Hard Red Winter Wheat delivery network and will be listed under CBOT rules.

Agricultural trading momentum and sector impact

Sorghum's premium over corn typically signals stronger international demand, while a deep discount can encourage domestic buyers to use more sorghum in feed rations. That makes the contract relevant to exporters, livestock feed users and biofuel market participants seeking clearer price signals across competing grain uses.

The launch also comes as CME Group reports strong activity in its agricultural complex. The exchange says agricultural products reached record quarterly volume of 2.1 million contracts in the second quarter of 2026, while corn futures and options posted record open interest of 4.1 million contracts and the second-highest quarterly trading volume on record at 695,000 contracts.

Our earlier coverage of tariff-driven pressure on Midwest farmers highlighted how trade-policy uncertainty was squeezing farm incomes, raising costs, and undermining confidence in export demand. We also noted that disrupted trade flows can ripple through rural investment and supply chains, making planning and risk management harder for producers facing volatile global markets.

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