National Sorghum Producers is urging caution following CME Group's announcement of a proposed sorghum futures contract, saying important questions remain about whether the contract will effectively serve producers.
Amy France, chair of National Sorghum Producers and a Kansas farmer, said the introduction of a sorghum futures contract has the potential to be an important development for the industry. However, she emphasized that the organization's priority is ensuring the proposed contract meets the needs of sorghum growers before it is implemented.
According to National Sorghum Producers, growers and industry organizations submitted recommendations aimed at improving the proposed contract. Those recommendations included more appropriate delivery points and additional safeguards designed to support contract liquidity.
The organization said those recommendations were not incorporated into the proposed CME contract, which it said is based on a wheat market model.
National Sorghum Producers said it will continue working with CME Group as the implementation process moves forward. The organization plans to advocate for changes to the contract, seek clarification on unresolved issues and provide producers with information to help them evaluate the proposed futures contract and its potential effects on sorghum marketing.
Source: National Sorghum Producers, "NSP Chair Amy France statement on proposed CME sorghum futures contract"