Corn falls despite USDA data

DES MOINES, Iowa (Agriculture.com)--The U.S. soybean stockpile is not changing, despite strong exports. Corn stocks are falling, according to the USDA's February Supply/Demand estimate Monday.

After reacting positively to the USDA data, the corn market closed lower Monday.

The March corn futures contract settled 1 1/4 cents lower at $4.43. The March soybean futures contract finished 6 cents lower at $13.25. March wheat futures ended 7 cents higher at $5.84 per bushel. The March soymeal futures contract ended $2.50 per short ton lower at $444.20. The March soyoil futures ended $0.17 higher at $38.73.

In its report, USDA pegged the U.S. 2013-14 Soybean stocks, at the end of the marketing year on August 31, at 150 million bushels. That is in comparison to the trade's average estimate of 143 million bushels and the USDA's January estimate of 150 million.

For corn, the USDA sees the U.S. 2013-14 stocks at 1.481 billion bushels vs. the average estimate of 1.606 billion bushels and the USDA's previous estimate of 1.631 billion.

The USDA pegged the 2013-14 U.S. wheat stocks at 558 million bushels compared to the average trade estimate of 602 million bushels and the USDA's previous estimate of 608 million.

WORLD STOCKPILES

On Monday, the USDA estimated world wheat stocks at 183 million metric tons, compared with the average trade estimate of 184.7 million metric tons and the USDA's previous estimate of 185.4 million metric tons.

On soybeans, the world stocks were estimated at 73.0 million metric tons vs. the average trade estimate of 72.4 million metric tons and the USDA's previous estimate at 72.3 million metric tons.

For corn, the USDA estimates world stocks at 157.3 million metric tons vs. the average trade estimate of 159.0 million metric tons vs. the USDA previous estimate at 160 million metric tons

Indian veg oil imports rise near to one-year high

Indian veg oil imports rise near to one-year high

The Pulic Ledger .Monday January 13 2014

India's vegetable oil imports in December climbed 13% to an 11-month high, data from a trade body showed, as poor local supply and fears the country would soon hike duties on overseas purchases of edible oils prompted traders to stock up.

The government finally hiked duties last week - to 10% on all refined edible oils, including palm oil, up from 7.5% - after fierce lobbying from domestic refiners desperate to curb a flood of cheap imports from Indonesia, the world's leading palm oil producer.

Canola continues downward slide

ICE Canada Review: Canola continues downward slide

Monday January 13 2014

Canola contracts on the ICE Futures Canada platform were weaker on Monday, hitting fresh contract lows once again as the path of least resistance remains pointed down from both a technical and a fundamental standpoint.

Canada's record large canola crop continued to overhang the market, said traders. While crush margins remain historically strong, the domestic crush has been running behind expectations and logistics issues are also expected to limit the export potential going forward, according to participants. The resulting likelihood of a large carry-out was a bearish influence on the market.

Decoding the concept: Value at Risk

When a person invests in stock market, one of the most important questions is: What is the maximum amount that he can lose on his investment? Value at Risk (VaR) provides an answer to this, within a reasonable bound.

VaR calculates the worst expected loss over a given time horizon at a given confidence level under Normal Market Conditions. It can be measured at the portfolio, sector, asset class  and Security level. VaR is particularly useful for investment banks, financial institutions and mutual fund investment managers.VaR revolves around two main parameters- the time horizon and the confidence interval. The time horizon corresponds to the horizon for which we are calculating risk. If we are calculating daily VaR, we are estimating the worst expected loss that may occur by the end of the next trading day.Usually, VaR is calculated for a time horizon of one day or one month,that is, the maximum losses that an investorcan incur at the end can of one trading day

or one month (21 trading days). The confidence level is a reliability measure that expresses the accuracy of the result. A confidence level of 95% means that on 5 out of 100 trading days, the VaR would exceed the calculated maximum loss.

There are mainly three methods to calculate VaR- analytical, historical simulation and Monte-Carlo simulations. Analytical VaR is also called Parametric VaR since it assumes that returns are normally distributed. – Analytical VaR of a single asset

Case Study 1

Suppose an investor invests Rs. 20 lakh in a single asset over a time horizon of 1 day and the VaR for this portfolio is found to be Rs. 1,72,400 at 99% confidence interval.

This means that there is a 1% chance that this asset may lose at least Rs. 1,72,400 at the end of the next trading day under normal market conditions.

Case Study 2 – Analytical VaR of a portfolio of two assets

Suppose another invests Rs. 1 crore in a portfolio diversified across two asset classes. The VaR at a 95% confidence level over a one-day horizon is calculated to be Rs. 4,98,900.

This means that there is a 5% chance that this asset may lose at least Rs. 4,98,900 at the end of the next trading day under normal market conditions.

Case Study 3 - VaR of a portfolio of five equally weighted schemes

We considered a portfolio consisting five equally-weighted schemes which belonged to equity, debt, gilt, balanced and liquid funds respectively. We calculated VaR for three different periods – 2006-07, 2007-08 and 2010-11. The VaR for the portfolio is listed as follows:

*VaR calculated for 90% confidence interval