All in all, Archer Daniels Midland (ADM) posted a stellar second-quarter earnings report. Net income came to $732 million or $1.14 per share. This compares to $567 million, or $0.88 per share in the same period a year ago. The Street was looking for $0.78 per share.

Revenues rose by 32% to $20.93 billion. The consensus estimate called for $17.5 billion.

The next year may bring higher global grain prices. Several factors are coming together to create supply-demand shortages. Let's first look at the demand side.

Globally, the demand for grains, both feed and consumer products, is increasing rapidly. Developing countries are coming out of the recession and their people are demanding more food products. Food prices are rising across the globe. A Wall Street Journal (subscription required) article states that the United Nations Food and Agriculture Organization said its Food Price Index rose 3.7% to 205 -- 44 points in November -- the fifth straight monthly increase. This takes the index to just 8 points below its peak in June 2008.

World grain markets are in a state of confusion. A prolonged drought in Russia and neighboring Ukraine are causing prices to skyrocket. Wheat prices have risen 58% since May.

Russia plans to ban wheat shipments starting Aug. 15 after concluding that its grain harvest may be down as much as 38% this year, to 60 million tons. The drought is affecting not only this year's crop but also next year's. There is worry that Russia may not get enough rain to plant its winter wheat crop before the frost starts in September.

You don't often see these moves in commodities, but when they happen, look out below. Two days ago, September wheat closed "limit up" -- 60 cents. That means that the market stopped trading. You could not enter a buy order.

On Friday, just the opposite happened. Wheat fell the daily limit of 60 cents. September wheat closed at $7.25 3/4 per bushel. A "limit down" move means that the market stops trading. At that point you cannot enter a sell order and are locked in. On Monday, if the market opens lower but not limit down, you can sell out but at a big loss.

In a move that is creating havoc in the grain markets, Russian Prime Minister urged a temporary ban on Russian grain exports. The ban may begin as early as next week and would last through December.

Putin said the a ban would be "appropriate." Russia has "sufficient reserves of grain, but we must prevent domestic prices from rising, preserve cattle herds and build up reserves for next year."

Trading in the wheat market has become frantic. Russia is suffering the worst drought in 50 years, causing severe damage to their wheat crop.

Traders at Glencore, the world's largest commodities trader, have asked Russia to halt exports. If Moscow imposes an export ban, Glencore could declare a "force majeure," a clause that allows them to cancel deals due of reasons beyond their control.

Like 1973 when Russia was forced to buy wheat from the U.S. during the cold war, this could be one for the history books. Russia is suffering its worst drought in 50 years.

Rainfall along the Volga River was 10% to 30% of it long-term average. Temperatures are so hot that workers are forced to take breaks in their work schedule. Add to this wildfires covering more than 600-square miles, and you have major crisis brewing.