Market Matters Blog

On July 21, 2026, Chicago Mercantile Exchange (CME) Group announced plans to launch sorghum basis futures and trading, which after regulatory approval, will start trading Aug. 24, 2026, on the Chicago Board of Trade (CBOT).

"The new basis contract reflects the price difference between sorghum and corn -- two types of grain used in animal feed as well as ethanol feedstock. Sorghum's premium over corn usually signals international demand driving values higher. A deep discount compels domestic buyers to shift feed rations toward cheaper sorghum," according to the CME news release.

"While sorghum prices tend to track corn closely over extended macroeconomic cycles, geopolitical events and regional supply shifts can disrupt that relationship," said John Ricci, managing director and global head of agricultural products, CME Group. "In recent years, the sorghum-to-corn cash spread has experienced considerable volatility, swinging from sharp premiums to steep discounts. The sorghum futures contract will provide market participants a precise instrument to hedge that basis risk."

The contracts will be physically delivered, with grain being loaded out by truck or rail from a network of elevators in Kansas, the nation's largest sorghum-producing state, by using the established Kansas City Hard Red Winter Wheat delivery network. According to KC HRW wheat rule No. 14H06, "Delivery Points, Regular elevators or warehouses shall be located in the switching limits of: 1.) Kansas City, Missouri/Kansas; 2.) Hutchinson, Kansas; 3.) Salina/Abilene, Kansas; or 4.) Wichita, Kansas."

It is interesting to note that during the 1970s, grain sorghum contracts were tried at both the CBOT and KCBT but failed to gain traction. In May 1989, KCBT revived and relaunched a "redesigned" grain sorghum futures contract, but in December 1999, KCBT delisted the contract. According to the National Sorghum Producers website on Feb. 4, 2022, "because of the liquidity issues with KCBT sorghum contract, grain buyers continued to use the corn contract, which suggested the basis risk between corn futures and cash sorghum wasn't anything that couldn't be managed."

Fast-forward to 2026. The CME noted on its website, "Although sorghum correlates with corn over long horizons, localized supply dynamics and geopolitical factors frequently cause the cash spread between the two grains to fluctuate significantly. Priced directly as a differential to corn futures, the new 5,000-bushel sorghum basis contract allows market participants to isolate and manage this specific structural risk, bypassing flat-price liquidity hurdles and avoiding exposure to the directional price movements of the broader grain complex."

Here is a link to the new sorghum contract information: https://www.cmegroup.com/….

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow her on social platform X @MaryCKenn

(c) Copyright 2026 DTN, LLC. All rights reserved.