This week, in several consecutive days, we will introduce you to the main factors that, according to science, determine prices on grain markets.

There is no farmer who grows wheat and does not know how much labor, time, money and energy it costs him. At harvest, the balance sheet becomes clear - quantity and quality of harvest.

And the final bill comes out only after the harvest has passed through the market. The usual question is "will there be a price this year?" Unfortunately, the answer can never be clear. There is always a price, but what determines its size?

For some, the word of the traders from the region is decisive, others find a connection with the presence of ships in the ports, others are of the opinion that state intervention has an impact, fourth see the correlation with the climate, fifth look at the surrounding Black Sea region, sixth - at the EU, seventh to world exchanges,  the dollar , oil, etc.

It is an indisputable fact that all these factors have an influence, but it would be wrong to consider them as independent entities. They are interrelated and dependent on each other, and their impact on the market is synergistic.

Grain reserves are imposed as a model in each country and act as a buffer between producers and consumers of grain. Typically, destocking occurs if demand increases faster than supply, leading to higher product prices.

Falling inventory levels, however, can make the market more vulnerable to an unforeseen supply disruption or sudden surge in demand.

Another factor is the so-called government intervention. Given that wheat is one of the most important sources of food, governments and economies - both developed and developing - may seek to limit its supply (or stockpile it) in order to support local farmers, consumers or both sides.

Governments may also restrict exports of certain staple foods, particularly when fears of domestic shortages and/or high prices are high. A number of countries, such as Russia, Turkey, China, etc. often impose restrictions on wheat exports to keep domestic prices down and ensure availability.

However, the opinion of experts is that such actions worsen the situation at the global level. By reducing the the amount of wheat available to the world market, the prices increase further.

Although not directly tied to the wheat market, global events over the past three decades have changed markets forever. Recession, unemployment rates around the world, shocks in energy prices and related monetary policies throughout the global economy, the COVID crisis and a host of other events have caused changes in wheat prices.

Hotspots in Ukraine and the Middle East are yet to change market directions.

An example of market distortion is the US embargo imposed in the early 1980s on the export and trade of grain and technology with the Soviet Union in response to their invasion of Afghanistan. The measure is restrictive and causes the former Soviet Union to divert to Turkey and other destinations. Years later, the embargo was lifted, the union fell apart, but not the newly created ties. The market was changed.

Today, we are once again witnessing a number of restrictions imposed by the EU and the US in response to the military actions in Ukraine, but what will be the global effect of these and how will grain flows change remains to be seen.

What are the other factors dictating the course of world stock exchanges and grain markets, follow in the news of Agrinizer in the coming days.