Organic corn prices are rising, trading near $8.50 delivered in the western Mid-west and trading above $400 per short-ton in California. It’s unlikely that prices will decline while the board continues to rise, with conventional corn futures hitting a 7-year high. The ratio of organic corn prices in the Mid-west relative to the board price is 1.37, which is the lowest the ratio of organic corn prices to conventional corn prices have been since 2015. From a technical analysis standpoint, the CME corn board contract should test resistance near the Fibonacci level at 6.39, 3% higher (chart), and the 2013 highs at 7.48 (21% higher). At this level, with the ratio at 1.37, organic corn would test $10.24 per bushel. If the ratio declined to 1.25, which is more likely, organic corn prices would test $9.35 per bushel. As a point of reference, the Dec 21 contract has a $0.85 inversion, while the Dec 22 contract has a $1.35 inversion. Nobody will likely be storing new crop corn.
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