Global corn prices will likely move sideways or lower over the next few months, but a supply disruption due to adverse weather could spark another rally, a senior Credit Suisse executive said Thursday.

Growers in countries including the No. 1 producer, the U.S., responded to sharply higher corn prices in June by switching to corn from soybeans, which are direct substitutes for each other, Ric Deverell, Credit Suisse's head of global commodities research, told a conference.

The near-month corn futures contract on the Chicago Board of Trade reached a record of almost $8 a bushel in June, and has swung as low as $6/bushel in the half year since. It settled at $6.585/bushel Wednesday.

Deverell said higher production can keep prices in check for the time being, but overall fundamentals are strong because the global corn supply situation is about as tight as it has been in the past four decades.

Last year, corn acreage expanded in the U.S., the world's biggest exporter, but production still fell due to adverse weather. The country normally accounts for more than half of the global corn trade, but it is likely to slump this year, with inventories at the end of August forecast to fall to 21.6 million metric tons from 28.7 million tons a year earlier.

Close to 40% of U.S. corn output is used to produce ethanol, which constrains exports, Deverell said. With crude oil above $100 a barrel and given government incentives, it is still economical to blend gasoline with ethanol, he added.

However, global corn trade growth may also be slow if China's plans to boost output and minimize imports by shifting land from soybeans succeed, Deverell said.

In April 2009, China became a major corn importer for the first time in almost 15 years, and traders have said that it may have purchased close to 4.0 million tons of U.S. corn between March and September last year.

Deverell said weather will continue to be a crucial factor in determining corn prices, which may rise further if the current spell of dry weather in South America is prolonged.

The impact of dryness in Brazil and Argentina on size of the upcoming corn harvest isn't fully clear to date, but a drought could reduce output and push up prices again.

Argentina is world's second-largest corn exporter. It shipped out 15.4 million tons in the marketing year ended June 30, 2011, up 19% from 2009-10, according to the International Grains Council.