Farm Fuels In Focus | Diesel Advice Updated April 12

Posted on 04/12/2018 12:20 PM

 

Book remaining farm diesel needs for spring and summer fieldwork at current prices.

  • May 2018 natural gas opened today at $2.67, down a penny from our last report.
  • Farm Diesel is 2 cents lower on the week at an average of $2.37 per gallon.
  • May 2018 WTI crude oil opened the day at $66.75, up $3.05 from our last report.
  • May 2018 Heating oil futures opened the day at $2.09, up 11 cents from our last report.
  • Propane is unchanged at $1.43 per gallon regionally.

Farm Diesel -- Farm diesel was led lower by South Dakota, which fell 14 cents per gallon as Kansas dropped 3 cents and Indiana fell a penny. Nine states were unchanged and no state posted a higher farm diesel price on the week.

This week's price action prompts us to finish booking spring/summer farm diesel. We already have 50% of our anticipated needs booked, and with bullish sentiments growing in crude oil and distillates, we feel it is prudent to take advantage of this week's price dip. It is important to point out that there are more bearish factors in the crude oil market than bullish presently, but one of the strongest market movers is, once again, in play -- the fear premium.farm diesel chart

Despite weekly production of a record of 10.5 million barrels reported by EIA, a 1.1 million barrel national stocks build and refinery utilization rates at 93.5% (the highest since 2005), crude bulls are clearly in charge. The main source of fear premium is the Trump administration's threats to fire missiles at targets in Syria, a move that Russia has vowed to avenge.

Meanwhile, EIA recently forecast retail summer fuel prices will be 11% above last summer's. That will pull distillates higher as well, including farm diesel.

We have been waiting for an opportunity to finish booking for spring/summer, and this week's price action is just the setback we have been looking for.

Finish booking farm diesel for spring and summer fieldwork right away to take advantage of the current price pullback before higher heating oil and crude oil futures pull farm diesel higher.


  • Distillate inventories reported by EIA softened 1.0 million barrels to 128.4 mmbbl. Stocks are currently 21.8 mmbbl below the same time last year.
  • The regionwide low currently lies at $2.19 in Wisconsin. The Midwest high is at $2.61 in Missouri.
Farm Diesel 4/12/18
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$2.44
$2.45
Unchanged
$2.45
Iowa
Illinois
$2.31
$2.31
Unchanged
$2.31
Illinois
Indiana
$2.49
$2.49
-1 cent
$2.48
Indiana
Ohio
$2.44
$2.21
Unchanged
$2.21
Ohio
Michigan
$2.51
$2.37
Unchanged
$2.37
Michigan
Wisconsin
$2.19
$2.19
Unchanged
$2.19
Wisconsin
Minnesota
$2.33
$2.34
Unchanged
$2.34
Minnesota
North Dakota
$2.43
$2.39
Unchanged
$2.39
North Dakota
South Dakota
$2.51
 
$2.50
 
-14 cents
 
$2.36
 
South Dakota
Nebraska
$2.44
$2.40
Unchanged
$2.40
Nebraska
Kansas
$2.35
$2.36
-3 cents
$2.33
Kansas
Missouri
$2.86
$2.61
Unchanged
$2.61
Missouri
Midwest Average
$2.44
$2.39
-2 cents
$2.37
Midwest Average

Propane -- LP was unchanged on the week with only Michigan posting a price change on the week... down 2 cents per gallon. All other states in our survey were unchanged on the week.


  • According to EIA, national propane inventories softened 0.417 million barrels -- now 4.535 million barrels below the same time last year at 35.832 million barrels.
  • The regionwide low is at $1.20 per gallon in Wisconsin, and the regionwide high is in Indiana at $2.01.
LP 4/12/18
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.40
$1.35
Unchanged
$1.35
Iowa
Illinois
$1.43
$1.43
Unchanged
$1.43
Illinois
Indiana
$2.01
$2.01
Unchanged
$2.01
Indiana
Ohio
$1.35
$1.35
Unchanged
$1.35
Ohio
Michigan
$1.24
$1.24
-2 cents
$1.22
Michigan
Wisconsin
$1.20
$1.20
Unchanged
$1.20
Wisconsin
Minnesota
$1.71
$1.64
Unchanged
$1.64
Minnesota
North Dakota
$1.36
$1.39
Unchanged
$1.39
North Dakota
South Dakota
$1.47
 
$1.47
 
Unchanged
 
$1.47
 
South Dakota
Nebraska
$1.26
$1.21
Unchanged
$1.21
Nebraska
Kansas
$1.63
$1.29
Unchanged
 
$1.29
Kansas
Missouri
$1.40
$1.55
Unchanged
 
$1.55
Missouri
Midwest Average
$1.46
$1.43
Unchanged
$1.43
Midwest Average

farm diesel heating oil spread chart

Add new comment