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Few people know more about commodities than top hedge fund manager Renee Haugerud. And what she sees happening in 'the softs' has her very worried.

Of greatest concern to her is the price of corn, which has surged in recent months due to sizzling hot temperatures scorching most of the growing region.

And although temperatures are starting to ebb lower, Haugerud says it's too late. "The corn crop for this year is gone," she says. "We can't improve it."

Haugerud tells us that the ripple will be substantial. Corn is used in a wide range of products from candy and ice cream to aspirin and toothpaste.

And considering the harvest is much smaller than expected, "We need to do something about the renewable fuel standard mandate," says Haugerud. If we don't, related prices could surge.

By doing something about the renewable fuel standard or rfs, Haugerud is referring to the use of corn to create ethanol. Currently, about a third of the total harvest goes toward making this fuel.

"But so far the government shows no signs of relaxing the mandate."

That's a big problem because it squeezes supply. And Haugerud says supply is what matters right now. "Although demand determined prices earlier in the decade, now it's supply," she says.

Of course that begs the question won't supply increase substantially at some point. After all, the chances of another unseasonably hot and dry summer are slim.

Haugerud says that's not the way to look at the market.

She thinks this year's drought simply accelerated a situation that was already growing quite serious. And that is, supply can't keep up with demand.

"We're hitting a wall on productivity gains," she says, "everything from irrigation to fertilization to genetic engineering."

Unless there's a meaningful development, "Food could be the new distressed asset," she says. And in the near term, "there's no reason that corn can't trade $10," she says.

*Although many people have made similar forecasts, Haugerud's outlook carries weight. Not only is she a top commodity trader, she's a graduate of the University of Montana with a major in forestry - and perhaps equally important - she grew up on a farm.

Haugerud was among the pros profiled in a recent special feature titled Learning from the Legends. Click here to check it out.