Farm Fuels in Focus: Farm Fuels Fall Slightly

Posted on 03/09/2017 10:25 AM

 

  • August 2016 natural gas opened today at $2.66 -- down 9 cents from our last Fuels in Focus.
  • Farm Diesel is a penny lower on the week at an average of $1.87 per gallon.
  • September 2016 WTI crude oil opened the day at $45.65 -- up 46 cents from our last report.
  • August 2016 Heating oil futures opened the day at $1.40 -- down 1 cent from our last report.
  • Propane is down a penny on the week to an average of $0.98 per gallon regionally.

Diesel"Farm Diesel -- Michigan led the way lower in farm diesel this week, softening 16 cents per gallon. Iowa fell a nickel as Missouri fell 3 cents per gallon. Nebraska posted our only price gains, adding a penny as 8 of the 12 states in our price survey are unchanged on the week.

We are content to wait out farm diesel price strength for the time being. We expect an opportunity to book some diesel for summer and early fall in the near-term. Crude oil supplies have fallen over the past few weeks which will limit pressure on fuels, but excessive gasoline production may lead refiners to refocus at least a little on distillate production. Our spread analysis suggests sideways farm diesel price action near-term with a downward bias, but pressure will be limited as long as crude oil is above $40.00 per barrel.

If crude makes a sustainable move above $60 bucks, we will book aggressively. If crude drops below $40 per barrel, we will book aggressively. For now, rangebound crude prices will mean rangebound farm diesel prices as well.

  • Distillate inventories reported by EIA fell 0.2 million barrels to 152.8 mmbbl. Stocks are currently 11.3 mmbbl above the same time last year.
  • The regionwide low currently lies at $1.74 in Missouri and the Midwest high is at $1.99 in Indiana.
Farm Diesel 7/21/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.82
$1.86
-5 cents
$1.81
Iowa
Illinois
$1.90
$1.90
Unchanged
$1.90
Illinois
Indiana
$2.11
$1.99
Unchanged
$1.99
Indiana
Wisconsin
$1.92
$1.92
Unchanged
$1.92
Wisconsin
Minnesota
$1.93
$1.95
Unchanged
$1.95
Minnesota
South Dakota
$1.84
$1.84
Unchanged
$1.84
South Dakota
North Dakota
$1.80
$1.84
Unchanged
$1.84
North Dakota
Nebraska
$1.85
$1.83
1 cent
$1.84
Nebraska
Missouri
$1.73
$1.77
-3 cents
$1.74
Missouri
Kansas
$1.76
$1.78
Unchanged
$1.78
Kansas
Ohio
$1.92
$1.92
Unchanged
$1.92
Ohio
Michigan
$1.80
$2.01
-16 cents
$1.85
Michigan
Midwest Average
$1.87
$1.88
-1 cent
$1.87
Midwest Average

Propane

Propane -- The middle of July is upon us and as we expect to book propane soon, we offered up A Few Thoughts on Propane Price Risk in a separate InputsMonitor.com article -- click here to read the post.

I still advise booking 100% of your home heating and confinement operation needs through March 2017 before the first snowflakes fly. If you want to gamble on lower late summer prices, gamble on propane for grain drying and on just a portion of confinement heating needs. We have not yet pulled the trigger on propane, but many dealers will offer their winter contract prices this time of year, the price of which is often good through September. That being the case, we do not expect propane prices to change much between then and now. If you have a decent bid in hand, book for home heat first, and agricultural purposes second.

  • According to EIA, last week, national propane inventories fell 0.078 million barrels -- now 0.253 million barrels below the same time last year at 87.437 million barrels.
  • The regionwide low is at $0.85 per gallon in Ohio and the regionwide high is in Indiana at $1.21.
LP 7/21/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$0.93
$0.90
Unchanged
$0.93
Iowa
Illinois
$0.99
$0.99
Unchanged
$0.99
Illinois
Indiana
$1.29
$1.21
4 cents
$1.21
Indiana
Wisconsin
$1.00
$1.00
Unchanged
$0.99
Wisconsin
Minnesota
$0.95
$0.93
Unchanged
$0.92
Minnesota
South Dakota
$0.95
$0.95
Unchanged
$0.95
South Dakota
North Dakota
$0.86
$0.86
Unchanged
$0.86
North Dakota
Nebraska
$0.90
$0.89
Unchanged
$0.86
Nebraska
Missouri
$1.16
$1.16
Unchanged
$1.06
Missouri
Kansas
$1.09
$1.11
Unchanged
$1.08
Kansas
Ohio
$0.85
$0.85
Unchanged
$0.85
Ohio
Michigan
$0.98
$0.98
Unchanged
$1.09
Michigan
Midwest Average
$1.00
$0.99
-1 cent
$0.98
Midwest Average

 

index


 

"

Add new comment