Panic buying of wheat subsided on global markets on Friday, sending prices tumbling as officials reassured markets that ample global supplies would prevent a repeat of the 2008 crisis that triggered food riots around the globe.

Russia's worst drought in 130 years -- and an export ban announced Thursday -- has sent world wheat soaring with U.S. wheat prices nearly doubling in the past month. Many traders said the market has now factored in most of the damage as mounting supply problems prompted speculators to pour money into the market.

Russia's First Deputy Prime Minister Igor Shuvalov said on Friday the export ban from August 15 to year end may be revised depending on results of the harvest season.

Clouds of smoke from peat and forest fires sparked by ferociously high temperatures choked Moscow on Friday as Shuvalov made his comments.

Despite drought in Russia and other Black Sea states, crop conditions elsewhere are favorable. Global stockpiles are 50 percent higher than they were two years ago -- equal to 14 times as much grain as was lost in Russia's drought.

At this stage it's much too early to make comparisons with the 2007/08 price spike, said Ken Ash, director of trade and agriculture for the Paris-based Organization for Economic Development and Cooperation.

I think probably what we're seeing now is not fundamental supply and demand factors...but market expectations, he said.

Wheat prices slumped even as the first evidence emerged of shippers attempting to back out of deals, with trading companies that have sold Russian wheat considering canceling contracts that could involve up to 1 million tonnes of wheat.

U.S. wheat futures on the Chicago Board of Trade fell the maximum daily trading limit on Friday, tumbling 7.6 percent after nearly doubling since early July to $8.41 a bushel. Corn and rice futures were dragged along for the ride, with corn rising 30 percent and rice rising nearly 25 percent before Friday's sell-off.

In early 2008, U.S. wheat rose above $13 a bushel, fueling food inflation that triggered rioting in many countries across the world. But analysts said world stocks have surged, with the last couple of years producing the two biggest wheat crops in history.

This year's ample stockpiles are equal to about 30 percent of annual global consumption, according to the Washington research group Concept Capital.

Stocks are close to 50 percent higher today (than they were during the last price spike in early 2008). You had a completely different scenario then, said Barclays Capital analyst Sudakshina Unnikrishnan.

Russia on Thursday banned grain exports for several months to head off inflation, and the railroad monopoly said Friday it would stop loading grain for export from Saturday. Ukraine, another major wheat exporter, has imposed some new controls but has not halted shipments.

Traders are also closely watching the recently planted wheat crops in Argentina and Australia. A La Nina weather anomaly is expected to ramp up in the equatorial Pacific later this year, bringing dry conditions to South America, the U.S. Climate Prediction Center forecast.

The recent spike in wheat prices suggest food prices - particularly cereal and bakery products - may rise as well, as they did in 2008.

Manufacturers may have to ease up discounts that retailers pushed for during the global recession that slashed consumer spending.

If prices remain elevated for a sustained period, then the probability of upward adjustment in retail price of wheat and its derivatives goes up, Barclays Capital said in a report.

However, food prices tend to be politically sensitive, so we can expect some action from Asian governments.

Top consumers China and India are largely insulated from rising prices by sufficient wheat reserves.

Russia had been the world's third largest wheat exporter last year but is set to slide down the table this season with the worst drought since records began devastating crops.

Effectively, a big chunk of the global market is off-line -- there's going to be something like 5 million tonnes that aren't going to be available for export, said Matthew Kaleel, a commodities specialist at fund manager H3 Global in Sydney.

(Writing by Nigel Hunt in London and Lisa Shumaker in Chicago; additional reporting by Augustine Anthony in Islamabad, Rosemarie Francisco in Manila, Chikako Mogi in Tokyo, Manolo Serapio Jr and Harry Suhartono in Singapore, Himangshu Watts in New Delhi and Fitri Wulandri in Jakarta, Brad Dorfman in Chicago and Martinne Geller in New York; Editing by David Gregorio)