Corn prices have the most potential price upside of any major U.S. farm commodity this year amid a weak dollar, shrinking supplies and robust global demand, market analyst Richard Asplund said.

While a “huge” rally in the corn market is unlikely, prices may post “moderate” gains of 10 percent to 20 percent from last year’s levels, assuming favorable U.S. growing weather, Asplund said.

Generally, the longer-term outlook for grains, livestock and other agriculture commodities remains bullish as global economic growth boosts consumption.

“This has been a strong demand story,” said Asplund, who’s editor of the Commodity Research Bureau’s Futures Market Service newsletter, a unit of Chicago-based, Inc. “That’s the strongest kind of rally we have. I look for strength in grains to continue.”

Rising grains costs will further pinch beef, pork and dairy producers, who already watched profits come under pressure late last year as corn rallied above $6 a bushel. While cattle and hog prices are also expected to rise, it remains to be seen if that will be enough to offset rapidly appreciating feed costs.

Cattle and hog prices may increase by 5 percent to 10 percent this year, Asplund said, as the U.S. economy improves and a weak dollar encourages exports.

Corn futures surged 52 percent last year, the largest gain among the most actively-traded agriculture contracts at CME Group in Chicago. That topped the gains in wheat (up 47 percent), soybeans (up 34 percent), live cattle (up 25 percent) and lean hogs (up 22 percent).

Agricultural futures also outpaced the stock market as hedge funds and other speculators sought better returns in commodities. The Dow Jones Industrial Average rose 11 percent last year, while the Standard & Poor’s 500 index gained 13 percent.

At today’s close, March corn futures rose 9 ½ cents to $6.18 a bushel, down from a 29-month high of $6.34 reached Jan. 3.

Increasing investor demand for exchange-traded funds and other instruments linked to agricultural markets will contribute to strength in grain futures, Asplund said. At CME, agriculture trading rose to a record last year, partly on increased speculator activity.

Other analysts also expect corn will be among commodity leaders in 2011. Corn, along with soybeans and coffee, have potential to rise the most among about 10 commodities, Rabobank Agri Commodity Markets analysts said in a Dec. 21 report.

Record crops are probably needed to keep inventories from tightening further, Rabobank said. Favorable weather conditions “are necessary for almost all agricultural commodity markets in 2011 to rebuild inventory levels and prevent a rally in prices back to the highs of the 2007-08 commodity boom,” the report said.

According to USDA estimates, global corn use in 2010-11 will increase 3.1 percent, to 837.9 million metric tons, while stockpiles will decline 12 percent, to 130 million metric tons.

Among all commodities, Asplund expects crude oil and industrial metals such as copper to post the strongest gains in 2011. Even if China’s economy slows as expected, it will still need more oil, he said.

“There is both physical demand for oil and investment demand” for oil, Asplund said. “I could easily see oil getting above $100 a barrel.”

However, “if China stumbles and that causes a stumble in the U.S. and Europe as well, that would be a major bearish factor” for commodities, he said.

Oil futures, which rose 15 percent in 2010, traded around $90.30 a barrel late Wednesday.