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

USDA Jan 2014 Report

SOYBEAN: This month’s USDA report is termed as bearish for soy beans on increase in yield and production. Higher ending stocks for 2013-14 and increased production which is higher than the market expectation may bring prices under pressure.  This leads to a bearish data keeping the outlook weak from the report perspective. We expect the bears to dominate the markets during coming days on the back of the changes.  U.S. oilseed production for 2013/14 is estimated at 97.3 million tons, up 0.9 million tons from last month. Larger crops for soybeans, cottonseed, and peanuts are partly offset by reductions for sunflower seed and canola. Soybean production is estimated at 3.289 billion bushels, up 31 million bushels based on increased yields and harvested area. The soybean yield is estimated at 43.3 bushels per acre, up 0.3 bushels from the previous estimate. Soybean crush is raised 10 million bushels to 1.700 billion reflecting higher projected soybean meal exports, which partly offsets a reduction for Argentina. Soybean exports are increased 20 million bushels to 1.495 billion reflecting record shipments during the first quarter of the marketing year and strong sales through December. Soybean ending stocks for 2013/14 are projected at 150 million bushels, unchanged for last month.

CORN: With a marginal rise in production for 2013-14 and decline in ending stocks the outlook is positive from the USDA report perspective. Rise in production is marginal and may be mildly bearish for the corn prices. The market can trade firm with US corn ending stocks lowered from 1792 to 1631 million bushels.  Global ending stock is also lowered from 162.5 to 160.2 million tons. The record corn crop will definitely weigh on corn prices over the long term, unless the US export picks up. U.S. feed grain supplies for 2013/14 is projected lower with reduced production estimated for corn and sorghum. Harvested area for corn is raised 436,000 acres, but the estimated yield is lowered 1.6 bushels per acre to 158.8, reducing production 64 million bushels to 13.9 billion. Sorghum harvested area is lowered 148,000 acres and the yield is lowered 2.6 bushels per acre, reducing production 27 million bushels. Projected corn use for 2013/14 is raised with feed and residual use projected up 100 million bushels based on September-November disappearance as indicated by the December 1 stocks estimate.

WHEAT: The outlook for continues to be bleak for wheat on larger supplies and use with lower price expectation. Prices can be under pressure with mildly bearish corn and bearish soybean outlook. U.S. wheat supplies for 2013/14 are unchanged this month, but lower expected use raises projected ending stocks 33 million bushels. Feed and residual use is lowered 60 million bushels reflecting disappearance for June-November as indicated by the December 1 stocks released in the Grain Stocks report. The 2013/14 season-average farm price is projected 10 cents lower at the midpoint with the range narrowed to $6.60 to $7.00 per bushel.

COTTON: This month’s U.S. 2012/13 cotton forecast shows slightly higher production, resulting in a marginal increase in ending stocks. Production is raised 1000000 bales. Domestic mill use and exports are unchanged. Ending stocks of US is unchanged. The U.S. cotton estimates for 2013/14 are revised slightly to reflect higher production. Production is raised 118,000 bales from last month, due mainly to an increase for Texas. Domestic mill use is unchanged, but exports are raised to 10.5 million, leaving ending stocks unchanged at 3.0 million bales. The marketing-year average price is projected in a narrower range of 72-77 cents per pound, with the midpoint of 74.5 cents raised marginally from last month.

Commodity	Outlook
Soybean	Bearish
Corn	Mildly bullish
Wheat	Bearish
Cotton	Bearish

Rapeseed prices may fall further

Global rapeseed and canola prices will remain under downward pressure in 2014, as production reaches a new record high in the 2013/14 season, amid increased output in most major producers.

Market analyst Oil World projects global output of 67.7 mln tonnes, while The International Grains Council (IGC) also sees a 7% rise in output to 68.2 mln tonnes, as well as a 26% rise in carry-over.

Brazilian soy set for record crop and weaker prices

 Brazilian soy set for record crop and weaker prices

The Public Ledger Thursday January 09 2014

Extremely high temperatures, coupled with a lack of rain in several soy growing regions in west and south Brazil in the past few weeks, may frustrate hopes of a record 90 million tonne plus soy crop for 2013/14.

Should the adverse conditions persist, the price of soy beans, until recently 11% less than a year ago, should firm up, so farmers should be little affected by any losses in output. Should rains resume soon though, the hot, dry conditions may cause little damage.

EUR/USD rose to 1.3686, the highest level

EUR/USD rose to 1.3686, the highest level since January 2 and was last up 0.45% to 1.3668. For the week, the pair gained 0.29%.The pair is likely to find support at 1.3552, the low of January 8 and resistance at 1.3700.The dollar turned broadly lower after the Labor Department said the U.S. economy added 74,000 jobs in January, the smallest increase since January 2011 and well below expectations for 196,000 new jobs.The unemployment rate fell to a five year low of 6.7% from 7% in November, but this was due in part to people dropping out of the labor force. The labor participation rate fell to an almost 35-year low of 62.8%.

Palm Oil Drops to Two-Month Low as Soybean Oil Supplies Climb

Bloomberg By Swansy Afonso Jan 8, 2014 4:20 PM GMT+0530

Palm oil fell for a fifth day to the lowest level in almost two months on concern that demand for the tropical oil used in everything from food to fuel may shrink on increasing supplies of soybean oil.

The contract for March delivery retreated 0.6 percent to 2,547 ringgit ($778) a metric ton on the Bursa Malaysia Derivatives, the lowest price at close for the most active futures since Nov. 11. Futures are down 4.2 percent this year.

Global inventories of soybeans may be 71.46 million tons, more than the 70.62 million tons estimated by the U.S. Department of Agriculture in December, a Bloomberg survey showed. That may boost supplies of soybean oil, which competes with palm for use in food and fuel.

“Palm oil is currently facing downward pressure mainly brought about by weakening U.S. and China soybean markets,” said Tan Chee Tat, an analyst at Phillip Futures Pte., in Singapore. “Palm oil’s narrowing discount to soybean oil had encouraged substitution, shifting away some demand from palm oil to soybean oil in terms of food and biodiesel uses.”

Soybean oil tumbled to the lowest level since July 2010 yesterday in Chicago, narrowing its premium over palm oil to $51.73 a ton today, compared with an average of $238.69 in the past year, according to data compiled by Bloomberg. Soybean oil for March delivery retreated 0.7 percent to 37.67 cents a pound on the Chicago Board of Trade today, while soybeans were down 0.2 percent at $12.7375 a bushel.

Refined palm oil for May delivery slumped 2.5 percent to close at 5,786 yuan ($956) a ton on the Dalian Commodity Exchange, the lowest level for futures since Oct. 15. Soybean oil dropped ended little changed at 6,608 yuan, the lowest price since April 2009. 

Equities Leaving trend??

FEAR AND TENSION IN LIBYA: 'THERE IS GOING TO BE MASSACRE'

http://www.1041thetruth.com/news/116614668.html

Troops are massing in Libya's capital of Tripoli in what many residents fear could turn into a massacre fueled by foreign mercenaries, an eye witness in Tripoli told ABC News.

"What I've seen today is hundreds, if not thousands of troops" that are gathering along with helicopters, said a Libyan-American who is visiting family and did not want to be identified. "Men on jeeps and military people in the town are coming in. There is going to be a massacre."

The military was gathering in the nation's capital as multiple reports described a violent crackdown on anti-government protesters. Demonstrations have rocked the country in recent days and have spread from Libya's second-largest city of Benghazi to Tripoli.

Witnesses said foreign mercenaries were being used to shoot indiscriminately at protesters.

"They seem to be people from African cities, South Asian states, and for some reason, even European looking soldiers. But the majority of the ones that I saw seem to be foreign soldiers or mercenaries, whatever you want to call them," the witness told ABC News. "There's a lot of fear and tension."

Libya's UN ambassadors called for the country's dictator Moammar Gadhafi to step down today as protesters claimed to have taken control of Benghazi and fighting -- including the burning of government buildings -- spread to the capital of Tripoli where angry demonstrators stormed the state television station, set fire to government buildings and the Olympic Square.

Libyan officials appeared to be defecting from the leader who has ruled the country for 40 years. Two senior Libyan Air Force colonels arrived in Malta today seeking political asylum, saying they fled the country after they were ordered to attack protesters in Benghazi, according to various reports.

Anti-government protesters demanding the ouster of longtime dictator Gadhafi carried placards and signs saying "Free Libya" and "Gadhafi - murderer, criminal," and descended on the nation's capital and its second largest city this weekend despite a government crackdown.

Oil prices surged this morning as violence spread across the Middle East. Companies and countries prepared to evacuate their staff and citizens as the United States ordered embassy family members and all non-emergency personnel to depart Libya.

Italian news agency Ansa reported that Tripoli airport is in chaos, with hundreds of foreigners waiting to board planes to leave the country. One director of a French company reached at the airport said that "last night was terrible, shootings all over the place and a river of people in the streets even in the residential areas". He said he was trying to get about 40 employees and their families out "but this is a disaster, there are not enough planes," he told the news agency.

With landlines and communications cut and news media mostly blocked from accessing the country, it has been difficult to confirm reports of what's happening on the ground.

Protests Spread Across Middle East and North Africa: View ABC's Interactive Map.

The escalating violence comes a day after Gadhafi's son, Seif al-Islam, insisted in a televised message Sunday that his father is still in the country and in control and warned of a civil war if the protests aren't controlled.

He vowed that they would "fight until the last man, the last woman, the last bullet."

He also blamed the uprising on Islamic extremists and foreigners, claimed the media was exaggerating casualty figures, and offered his people a deal: constitutional reform and a new government in 48 hours or civil war.

"We are not Tunisia and Egypt," Seif al-Islam Gadhafi said. "Moammar Gadhafi, our leader, is leading the battle in Tripoli, and we are with him."

The State Department said it was "gravely concerned" about the "disturbing reports and images coming out of Libya," and said it had received "multiple credible reports that hundreds of people have been killed and injured in several days of unrest."

President Obama was briefed on the security situation in Libya Sunday night and he is considering "all appropriate actions," said a senior administration official.

"We are analyzing the speech of Seif al-Islam Qadhafi to see what possibilities it contains for meaningful reform," he said. "We will seek clarification from senior Libyan officials, as we continue to raise with them the need to avoid violence against peaceful protesters and respect universal rights."

Unlike Egypt, where 18 days of protests brought down the 30-year-long presidency of Hosni Mubarak, the protests in Libya have been particularly brutal.

Hospital officials and human rights groups say more than 200 people have been killed and thousands wounded since the unrest started about a week ago.

Protesters are calling for the ouster of Gadhafi, who has ruled the oil-rich country for more than 40 years.

"We need this guy to get out," said protester Ahmed Mansour. "Gadhafi, you are ruling over Libya, it's now your 42nd year. This type of issues is over in the whole world, there are no more dictatorships again in the whole world. We people are supporting each other and we need all dictators to get out of the whole world, not just Libya."

In Benghazi, the bodies of security forces were hung from flag poles after protesters took over a government building.

Oil futures rise amid Libyan tensions

HONG KONG (MarketWatch) — 

Oil futures advanced Wednesday ahead of U.S. crude-supply data due later in the day, and on concerns that a possible escalation of tensions in Libya will increase the risk 

of oil-supply disruptions.

February crude oil /quotes/zigman/2196836/realtime CLG4 +0.35%   rose 30 cents, or 0.3%, to $93.97 a barrel in electronic trading.

On Tuesday, the American Petroleum Institute reported a larger-than-expected draw of 7.3 million barrels in crude supplies. The more closely watched numbers from the U.S. Energy Information Administration are scheduled to come out on Wednesday at 10:30 am Eastern.

Soybean Futures Drop as U.S., Global Inventories Seen Expanding

Bloomberg-By Ranjeetha Pakiam Jan 7, 2014 9:31 AM GMT+0530

Soybeans declined on speculation that U.S. and global inventories before next year’s Northern Hemisphere harvest may surpass a government forecast in December. Wheat gained.

Soybeans for March delivery lost as much as 0.7 percent to $12.6775 a bushel on the Chicago Board of Trade, and was at $12.68 by 11:23 a.m. in Singapore. Wheat climbed 0.2 percent to $6.07 a bushel. Futures rallied to a two week-high yesterday on concern that cold weather may damage crops in the U.S., the world’s top exporter.

Global inventories of soybeans may be higher at 71.46 million metric tons from 70.62 million tons earlier while corn reserves were seen at 163.08 million tons from a forecast of 162.46 million tons in December, a Bloomberg News survey of 15 analysts and trading firms showed. U.S. corn stockpiles were seen at 1.86 billion bushels from 1.79 billion bushels, a separate survey of as many as 30 analysts showed. The U.S. Department of Agriculture is scheduled to update its reserve estimates at noon on Jan. 10 in Washington.

“Expectations for U.S. and global inventories for corn and soybeans to be revised higher this month do paint a bearish picture for prices,” said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia. “An upgrade to U.S. soybean production, combined with a modest improvement in South American production prospects, does suggest that global oilseed supplies will be at relatively comfortable levels.”

Corn for March delivery lost as much as 0.4 percent to $4.2625 a bushel and was at $4.265. 

Shinzo Abe on Deflation

Shinzo Abe on Deflation

GENEVA – At the dawn of a new year, the world is in the midst of several epic transitions. Economic growth patterns, the geopolitical landscape, the social contract that binds people together, and our planet’s ecosystem are all undergoing radical, simultaneous transformations, generating anxiety and, in many places, turmoil.

From an economic standpoint, we are entering an era of diminished expectations and increased uncertainty. In terms of growth, the world will have to live with less. To understand the implications of this, consider the following: If the global economy grew at its pre-crisis pace (more than 5% per year) for the foreseeable future, its size would double in less than 15 years; at 3%, doubling world GDP would take about 25 years.

This makes a significant difference to the speed at which wealth creation occurs, with profound effects on expectations. We ignore the power of compound growth to our detriment.

As for uncertainty, the world’s four largest economies are currently undergoing major transitions. The US is striving to boost growth in a fractured political environment. China is moving from a growth model based on investment and exports to one led by internal demand. Europe is struggling to preserve the integrity of its common currency while resolving a multitude of complex institutional issues. And Japan is trying to combat two decades of deflation with aggressive and unconventional monetary policies.

For each, the formulation and outcome of complex and sensitive policy decisions implies many “unknowns,” with global interdependence heightening the risk of large unintended consequences. For example, the US Federal Reserve’s policy of quantitative easing (QE) has had a major effect on other countries’ currencies, and on capital flows to and from emerging markets.

When QE was launched, it was the least flawed of the available policies, and it averted a catastrophic global depression. But its downsides are now apparent, and its abatement in 2014 could fuel further uncertainty.

The Fed’s QE policy, and variants of it elsewhere, have caused the major central banks’ balance sheets to expand dramatically (from $5-6 trillion prior to the crisis to almost $20 trillion now), causing financial markets to become addicted to easy money. This has led, in turn, to a global search for yield, artificial asset-price inflation, and misallocation of capital

As a result, the longer QE lasts, the greater the collateral damage to the real economy. The concern now is that when the Fed begins to taper QE and dollar liquidity drains from global markets, structural problems and imbalances will resurface. After all, competitiveness-enhancing reforms in many advanced economies remain far from complete, while the ratio of these countries’ total public and private debt to GDP is now 30% higher than before the crisis.

This source of uncertainty coincides with weakening performance in many emerging countries. Back in 2007, emerging-market growth was expected to outpace that of advanced economies by a wide margin, before converging. Today, the advanced economies contribute more to global GDP growth than emerging countries, where growth is forecast to average 4% in the coming years.

Economic conditions are slowly improving in high-income countries, but a range of downward pressures may persist for years. The US economy, for example, remains stuck in a subpar recovery: inflation is too low and unemployment is too high. Official data have often been better than expected, reflecting how resilient, adaptive, and innovative the US economy is, but pre-crisis consumer-spending and growth patterns are unlikely to recur.

Improvements in the eurozone are real but tenuous. The good news is that the disaster predicted by many pundits has been avoided, and the recession is coming to an end. But improvement does not mean resurgence: achieving the robust growth needed to reduce high unemployment, lower the debt/GDP ratio, and improve the fiscal outlook remains elusive. The greatest risk for the eurozone in the foreseeable future is not a disorderly exit by some countries, but rather a prolonged period of stagnant growth and high unemployment.

Meanwhile, the emerging-market slowdown may well persist, particularly in the largest economies. Over the past 15 years, the BRICs (Brazil, Russia, India, and China) have achieved remarkable progress, but their reforms – including new banking regulations and currency regimes – have been among the least difficult to implement

.

So-called second-generation reforms, which are more structural in nature, are vital to long-term growth but much more difficult to realize. Elimination of subsidies, labor market and judicial reforms, and effective anti-corruption measures are politically charged and often are blocked by powerful vested interests.

The global growth slowdown is taking place against a backdrop of rising economic inequality, owing to labor’s declining share of national income – a worldwide phenomenon, resulting from globalization and technological progress, that poses a serious challenge to policymakers. Systems that propagate inequality, or that seem unable to stem its rise, contain the seeds of their own destruction. But in an interdependent world, there is no obvious solution, because the high mobility of capital fuels global tax competition.

Even in stronger-performing countries, such as the US or the United Kingdom, faster GDP growth has yet to boost real incomes. In the US, for example, median household income has fallen by more than 5% since the recovery began. More generally, lower growth is fueling popular protest and social unrest, particularly in countries that were growing rapidly (for example, Brazil, Turkey, and South Africa), owing to the impact of rising living standards on expectations.

With most governments facing fiscal constraints, officials are reluctant to consider projects that might increase public debt. But there is some low-hanging fruit – productive investments that would boost long-term growth and therefore pay for themselves. A focus on four areas, in particular – infrastructure, education, green energy, and sustainable agriculture – could yield high economic and social returns.

Ultimately, however, the path to sustained growth requires not just new policies, but also a new mindset. Our societies must become more entrepreneurial, more focused on establishing gender parity, and more rooted in social inclusion. There simply is no other way to return the global economy to a path of strong and sustained growth

Soyabean (Bearish Fundamental)

At the spot market, soybean prices declined almost Rs 100-150 per 100 kg in spot markets in a fortnight due to weak demand from crushers.

Plant delivery prices were Rs 3,825-3,860 per 100 kg against Rs 3,850-3,900 per 100 kg couple of weeks ago.

Currently, average daily arrivals in Madhya Pradesh is around 100,000 bags of 100 kg each which were around 250,000 bags a month ago.

There are expectations of improvements in supply situation in the coming days which may lead to pressure in the counter.

Currently, both soymeal and soyoil demand is extremely low which is affecting the soybean buying in the domestic markets.

Soymeal export demand is low as the overseas buyers are finding the Indian prices higher compared with other international suppliers.

Soy meal, exports price at Kandla (Dec-Jan delivery) quoted lower at Rs 34,600/MT.

Soy meal prices depicted a weak trend, in tandem with the domestic soybean prices, led by a weaker exports demand by overseas exporters.

India's soya meal exports are likely to decline more than a quarter to 3 million tons in the year to September 2014 as overseas buyers opt for

cheaper supplies from South America.

India's soy meal prices continue to get competition from South American meal. Indian meal is priced higher than the South American meal

currently and market is about to enter the seasonally higher exports period. Also, soybeans exports from South America are likely to increase once

harvesting of the new crop begins.

Pressure from higher output forecasts in South America as well as favorable weather conditions in the key producing regions will impact the

market.

Soyabean prices in Nagpur Agriculture Produce and Marketing Committee (APMC) quoted down on lack of buying support from local crushing

plants. Fresh fall in soyabean oil, no takers to soymeal, and weak trend in Madhya Pradesh soyabean prices said to be the reasons for downward

trend in soyabean.

Argentina will harvest 55 million tonnes of 2013/14 soy, Rosario exchange said.