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.

This a story about rumor and weather. Wheat prices have skyrocketed to within 16 cents of their 2009 high, closing at $6.61 per bushel. The 2009 high was $6.77. Prices have surged 56% from their June lows.

You are no doubt asking: "Why such a big jump in prices?" The key word is drought, specifically the drought in the major growing areas of Russia, Ukraine and elsewhere in the Black Sea area. The drought is so bad that rumors are flying that Russia will limit wheat exports, driving purchasers to the U.S. According to Macquarie Group, parts of Europe also have been hit with drought, and Canada had excessive rain at planting time.

Global wheat output rose 12% to a record 682.3 million metric tons in the year through May.

According to Emmanuel Jayet of Agricultural Commodities Research at Societe Generale in Paris, wheat prices are expected to drop 13% by the end of December. The last big drop was during 2002 when prices fell by 19%.

Stockpiles of wheat will jump 12% by next May. Investors predict a further decline due to an overabundance. On October 30, there were 6.265 put options at $4.50 per bushel, more than any other grain contract ( a put option is an option to sell.)