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MONDAY, JULY 27, 2026   |   SPECIAL REPORT & ANALYSIS

MARKET PERSPECTIVE  |  SORGHUM FUTURES

Wrong Map, Thin Market: Why Sorghum Growers Are Balking at CME’s New Futures Contract

CME’s Aug. 24 basis contract would settle sorghum against Kansas wheat delivery points that touch barely a fifth of U.S. acreage — while Texas, home to 26% of plantings and a widening cash premium, sits outside the footprint.
 

Analysis  ·  July 27, 2026

CME Group wants a sorghum futures contract trading by Aug. 24 — and the nation’s sorghum growers are already on record against the proposal as written. The National Sorghum Producers (NSP) says the physically delivered basis contract, grafted onto Kansas wheat delivery infrastructure, would leave more than 80% of U.S. sorghum acreage outside the delivery footprint and expose farmers to thin markets and unreliable price signals. The group’s message is blunt: it will not back the contract as designed, and producers should not change their marketing plans because of it. NSP is not opposed to a sorghum futures contract. However, it does not believe the contract, as currently designed, will be workable for producers for the reasons detailed below. 

How the contract would work

The product CME announced is not a conventional flat-price futures contract. It is a basis contract: it prices the difference between sorghum and CBOT corn futures. A producer who uses it would in effect be managing two positions — a corn futures hedge plus the sorghum-versus-corn spread — a structure that puts a premium on user education from the first trade. Physical delivery would run through the existing Kansas City Hard Red Winter wheat delivery network in Kansas. The launch is pending regulatory review.

Table 1. The proposed contract at a glance. Source: CME Group announcement as summarized by the National Sorghum Producers, July 24, 2026.

The appeal of borrowing wheat infrastructure is obvious: the elevators are already registered, the procedures already exist, and the exchange can move quickly. But administrative convenience is not commercial fit. The HRW wheat network was built where wheat is grown and shipped — not where sorghum is.

Geography is the heart of the objection

A county-radius analysis cited by NSP found that counties touching at least one 75-mile radius around the current HRW delivery points account for just 19.4% of average U.S. planted sorghum acreage — about 1.16 million acres across 95 counties in Kansas, Missouri and Oklahoma, based on 2021–2025 plantings. Flip that around and more than 80% of the crop would face major delivery challenges. Texas alone represents 26% of U.S. average acreage, including 11.6% in South Texas — a region far outside the delivery footprint.

Figure 1. The delivery footprint on the map. Grain sorghum planted acres (2021–2025 average) by county; hatched counties touch at least one 75-mile radius around a current HRW wheat delivery point. Darker blues — the heart of the sorghum belt in western Kansas, and the crop’s Texas base off the map entirely — sit largely outside the hatched delivery area. Source: NSP county-radius analysis of USDA FSA acreage workbooks; U.S. Census Bureau boundaries.

Figure 2. Where the delivery area is — and where the sorghum is. Counties touching a 75-mile delivery-point radius hold 19.4% of average U.S. planted acreage; the county-intersection method counts whole counties and is a broad estimate. Source: USDA FSA annual acreage workbooks, 2021–2025; U.S. Census Bureau county boundaries.

“A contract carrying sorghum’s name must reflect where sorghum is grown, marketed and priced.” — National Sorghum Producers

Two markets, one settlement price

Why does the map matter so much? Because a delivery-based futures contract converges to cash values at its delivery points — and the cash market this contract would converge to is not the one most sorghum farmers sell into. Texas and Kansas state-average prices have diverged materially: Texas has been higher in 37 of 41 months since January 2023, and the annual gap has widened from 15 cents in 2023 to 96 cents through the first five months of 2026. A separate cash-bid comparison cited by NSP puts roughly an 87-cent-per-bushel difference between South Texas/Gulf values and estimated Kansas delivery-area basis.

Figure 3. State-average prices have pulled apart since 2023. State averages show regional variation and are not an estimate of contract settlement basis. Source: USDA NASS Prices Paid to Farmers; calculations reviewed July 24, 2026.

Table 2. Annual average sorghum prices, Kansas vs. Texas. Source: USDA NASS Prices Paid to Farmers.

For a Texas grower, that arithmetic is the whole ballgame. A hedge that settles to Kansas values while your cash market runs nearly a dollar higher is not risk management — it is a new source of basis risk layered on top of the old one.

A liquidity ghost and a process complaint

History supplies the second objection: past sorghum futures contracts failed to sustain trading. Without committed commercial hedgers and market-maker support, NSP warns, producers could face wide bid-ask spreads, unreliable price signals and greater manipulation risk — and, most dangerous of all for a farmer with a position on, the inability to get out. A thinly traded contract with a geographically narrow delivery territory is also the classic setup for corners and squeezes, which is why NSP wants a published convergence analysis and explicit safeguards before launch, not after.

There is a governance grievance underneath the technical one. Growers did not ask CME for the product, and NSP says they were not included in the contract’s fundamental design decisions. The group commissioned an independent analysis after learning of the proposal; its key recommendations are not reflected in what CME announced.

What NSP says a workable contract needs

Delivery tied to commercial reality. Evaluate western Kansas points — Liberal, Garden City and Dodge City — along with delivery differentials or other mechanisms that represent where sorghum actually moves.

Convergence analysis and safeguards. Validate deliverable supply, show how the contract will converge with cash values, and address the corner, squeeze and manipulation risks a limited delivery territory creates.

Demonstrated liquidity before producers rely on it. Secure participation from grain merchandisers, exporters, feedlots and ethanol plants; stand up an incentivized designated market-maker program; and report volume, open interest and bid-ask spreads transparently.

Producer education. Explain the two-trade basis structure and residual local basis risk. Because USDA and much of the cash market quote sorghum by the hundredweight while the contract trades in bushels, CME should publish worked examples using the 56-pound-per-bushel standard so farmers can compare local bids with the futures price without a conversion error doing the deciding.

Bottom line

NSP supports better price discovery and risk management for sorghum — but it does not support this contract as designed, and it says so in writing. The group will keep pushing for delivery, liquidity and education fixes rather than walking away from the table. To be clear, NSP is not opposed to a sorghum futures contract. However, it does not believe the contract, as currently designed, will be workable for producers for the reasons outlined above.

For producers, the practical read: treat Aug. 24 as the start of a test, not the arrival of a tool. Until the contract demonstrates deep, sustained liquidity and reliable convergence, approach it cautiously — and do not change a marketing plan solely because the product has been announced.

Sources: National Sorghum Producers, “CME’s Proposed Sorghum Futures Contract is Unworkable for Growers,” July 24, 2026; USDA FSA annual acreage workbooks, 2021–2025; USDA NASS Prices Paid to Farmers; U.S. Census Bureau county and state cartographic boundaries. Acreage-footprint figures use a county-intersection method and are broad estimates.