In the case of export-oriented economy, domestic prices are naturally influenced by world prices. The objectives of the study is to analyze the main factors that form the stock exchange listings of wheat futures on the leading stock exchanges of the world; to explore the relationship between the stock price trends and developments in grain prices in the Ukrainian market, as well as the reasons for the differences between them.
The study established that the main influence factors on grain futures are: the level of world stocks, exchange rates, inflation etc. Authors confirmed the existence of inverse correlation between the level of ending stocks and wheat price on the leading exchanges in the world in the long run. It is found that in the short term, prices are influenced not only by objective economic factors, but also by subjective, i.e. unrealistic expectations of market participants, the rumors and the distortion of market information. In particular, the exaggerated information in the summer of 2017 was the message about the drought, which greatly damaged the wheat crop in the United States.
This information did not materialize, but influenced the stock exchange quotations of wheat futures. Thus, the trend of stock prices in the short term is not always subject to “King effect”. Compared are the trends of the domestic and world grain prices. It was found that the factors of internal nature can have a serious impact on prices within a specific country, then there is divergence in the trends of development of world and domestic prices, as was shown by the example of the Ukrainian wheat market.
Due to such internal factors as active export of wheat and flour from Ukraine, the mechanism of VAT refunds to exporters, the concern of the domestic market players of the alleged national currency depreciation, domestic prices of wheat were kept in a growing trend, while stock prices on world markets went down.
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