The current drought shriveling much of U.S. crop is also being felt in Russia, raising fears of spiking global food prices. Wheat production from Russia, Ukraine and Kazakhstan will drop 30 percent from last year due to drought in those countries, according to a Reuters poll.

The median forecast from analysts and traders puts the aggregate crop for the three Black Sea exporting countries at around 70 million tons versus around 100 million tons last year. The region normally supplies around a quarter of world wheat export volumes.

Russia's wheat harvest, the region's largest, will fall to 45.5 million tons, well short of 2011's 56-million-ton crop, but will not fail as badly as in the severe drought of 2010.

Forecasts ranged from a worst case of 41 million tons for Russia to 50 million tons at best. The 2010 drought crop was 41.5 million tons. The latest monthly forecast from the U.S. Dept. of Agriculture is for 49 million tons.

The poll also forecast poorer crops from Ukraine and Kazakhstan, with the median responses pegging their wheat crops at 13 million tons and 12 million tons respectively.

This compares with production of some 22 million tons for each of these countries last year.

Global grain prices rose sharply in June and July as expectations for a record-breaking U.S. corn crop were dashed by the worst U.S. drought in over 50 years.

U.S. corn and wheat prices at near $8 a bushel and $8.90 a bushel respectively are up about 50 percent and soybeans up 20 percent, reviving memories of the global food price scare of 2007-2008.

Having hesitated to buy in the hope that prices might fall, buyers have now started returning to the market, which could prolong the rally.

"A further deterioration in weather conditions, potential former Soviet Union export restrictions and pent-up import demand create risks that global wheat inventories decline even more than we expect," said Damien Courvalin, commodities analyst at Goldman Sachs.

"Such an outcome in the face of inelastic food demand would likely push wheat prices sharply higher and well above corn prices," he added.