Have Old Crop Corn Prices Topped?

I believe that it's extremely unlikely that old crop corn prices have topped. Recently, the March corn contract surged 50 cents, moving from $6.88 to $7.32 over a six day span. Suddenly, the market turned lower, losing about half of the 50 cent gain. One reason for the setback in corn prices can be attributed to evidence that prices trading in the $7.20-$7.30 range seemed to choke off demand. With the strong basis, cash corn prices have been near $7.50 in central Illinois. A negative weekly corn export number (released Thursday March 7^th) tends to confirm that corn priced in the $7.50 area is shutting off demand. The ethanol crush continues to edge lower at these price levels, as well.
With projected ending corn stocks at pipeline minimum levels, the function of corn prices is to remain high enough for long enough to assure the rationing of tight stocks until the next harvest. Certainly the harvest and shipment of the South American crop will help alleviate this rationing process. However, widespread relief from South American corn may be 30 to 40 days away, possibly longer.
The old crop futures market remains totally inverted, a sign of tight supplies and an indication that prices could still move higher. The March/May corn spread has moved out to record highs. The next spread to likely move could be the May/July corn spread. Finding a way to participate in this spread, or in the May contract, with limited risk, is the subject of this article. March corn futures expire on Thursday, March 14^th. Currently the March is trading 19 cents over the May. This spread peaked recently at 24 cents over. Keep in mind these inversions are extremely rare as normally the board has a carry built into the spreads, which typically accounts for the cost of storage. Assuming that March expires next week, say 20 cents over the May, I'm willing to speculate that May futures will be well bid and possibly rally toward the expiration price of the March. The trick is finding a way to participate in this market without assuming a ton of risk.
I have two suggestions to consider. First, consider purchasing the April corn $7.10 calls at 3 cents. For a premium outlay of $150 per option, before commissions, one can own the right to be long May corn futures from $7.10 until the expiration date, which is March 22^nd. Second, consider establishing the May/July corn spread at 18 cents, risking a close in the spread below 15 cents. The upside target on this spread should be 28 to 32 cents over. The initial margin to hold this spread is $675. While it appears the risk, as outlined here is only 3 cents, one must be aware the spread could be well below 15 cents into the close, making the risk potentially more than 3 cents. Having said that, the spread will not expire as the April call option will, thus the risk of losing, due to time decay is eliminated. In addition, you'll be able to hold the spread through the March 28^th quarterly stocks and prospective plantings report. 
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