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CIH: Early July margins steady

CIH: Early July margins steady
Dairy margins held largely steady since the end of June, with movements in milk prices and feed costs largely offsetting, according to the latest CIH Margin Watch report from Commodity & Ingredient Hedging, LLC. From a historical perspective, forward profit margins for dairy producers remain at strong levels, over the 90th percentile for Q4 2013 and Q1-2 2014. The exception is Q3 2013, where record high feed basis for old-crop corn and soybean meal is weighing on profitability.
While milk prices are forecast lower from December forward based on Class III futures at the Chicago Mercantile Exchange, lower projected corn and soybean meal prices more than make up for that to help preserve forward margins. Visit www.cihmarginwatch.com.
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