Farm Fuels in Focus | Get on the Stick

Posted on 09/07/2018 12:22 PM

 

  • October 2018 natural gas opened today at $2.77, off 11 cents since our last report.
  • Farm Diesel is 2 cents lower on the week at an average of $2.49 per gallon.
  • October 2018 WTI crude oil opened the day at $67.88, down $2.18 from our last report.
  • October 2018 Heating oil futures opened the day at $2.20, off 4 cents from our last report.
  • Propane is unchanged on the week at $1.31 per gallon regionally.

Farm Diesel -- Our regional average farm diesel price fell 2 cents this week with Indiana off 12 cents as farm diesel chartKansas fell 7 cents. five states were unchanged as Iowa added 3 cents and North Dakota firmed 2 cents.

With WTI crude oil futures ranging below $70 per barrel, and heating oil futures off a few cents on the week, we expect farm diesel prices to fall next week again. Especially when we consider this week's 3.1 million barrel distillate stocks build. Harvest demand will support prices, but that does not necessarily mean we will see higher prices.

Our near-term forecast calls for sideways to lower prices for the next few weeks and while there is seasonal upside risk in play, market fundamentals are expected to keep a lid on diesel. We will book fairly aggressively should WTI and heating oil give indications of a pending price spike.


  • Distillate inventories reported by EIA firmed 3.1 million barrels to 133.1 mmbbl. Stocks are currently 14.6 mmbbl below the same time last year.
  • The regionwide low currently lies at $2.19 in Wisconsin. The Midwest high is at $2.69 in Indiana.
Farm Diesel 9/7/18
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$2.57
$2.57
+3 cents
$2.60
Iowa
Illinois
$2.31
$2.31
Unchanged
$2.31
Illinois
Indiana
$2.81
$2.81
-12 cents
$2.69
Indiana
Ohio
$2.30
$2.29
-2 cents
$2.27
Ohio
Michigan
$2.46
$2.45
Unchanged
$2.45
Michigan
Wisconsin
$2.19
$2.19
Unchanged
$2.19
Wisconsin
Minnesota
$2.59
$2.60
+1 cent
$2.61
Minnesota
North Dakota
$2.61
$2.61
+2 cents
$2.63
North Dakota
South Dakota
$2.54
 
$2.54
 
Unchanged
 
$2.54
 
South Dakota
Nebraska
$2.60
$2.60
-6 cents
$2.54
Nebraska
Kansas
$2.55
$2.63
-7 cents
$2.56
Kansas
Missouri
$2.52
$2.52
Unchanged
$2.52
Missouri
Midwest Average
$2.50
$2.51
-2 cents
$2.49
Midwest Average

Propane -- Propane was unchanged on the week with Illinois and Missouri each falling 4 cents per gallon. propaneEight states were unchanged as Iowa firmed 6 cents and Kansas gained 3 cents.

The heavy rains from late last week and early this week have moved out of Iowa and adopted a more southerly route. That will give central Belt states a chance to dry out a little. We still see that rain event as price-positive for propane, and we expect propane prices to rise seasonally from here. Support will arrive first from harvest activities and grain drying and then winter weather will take over.

Prices have acted about as expected although we had hoped prices would have placed a lower low than that observed by the Inputs Monitor.

But time is running out for propane and we advise farmers to book propane needs for grain drying, confinement operations, shop heaters and home heat at current prices. Supplies are not rebuilding as quickly as we had anticipated, and export demand remains very high. Couple that with harvest and heating demand and we have a recipe for higher retail LP prices.

If you have not already, get on the stick and book your fall and winter propane needs right away. As always, we advise you calculate your total propane needs from now until March 2019, and fill as much of that projected need as you have storage space for.


  • According to EIA, national propane inventories firmed 2.004 million barrels -- now 6.495 million barrels below the same time last year at 73.404 million barrels.
  • The regionwide low is at $1.05 per gallon in North Dakota, and the regionwide high is in Indiana at $1.63.
LP 9/7/18
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.17
$1.17
+6 cents
$1.23
Iowa
Illinois
$1.43
$1.43
-4 cents
$1.39
Illinois
Indiana
$1.63
$1.63
Unchanged
$1.63
Indiana
Ohio
$1.35
$1.35
Unchanged
$1.35
Ohio
Michigan
$1.40
$1.40
Unchanged
$1.40
Michigan
Wisconsin
$1.20
$1.20
Unchanged
$1.20
Wisconsin
Minnesota
$1.33
$1.28
Unchanged
$1.28
Minnesota
North Dakota
$1.05
$1.05
Unchanged
$1.05
North Dakota
South Dakota
$1.47
 
$1.47
 
Unchanged
 
$1.47
 
South Dakota
Nebraska
$1.15
$1.14
Unchanged
$1.14
Nebraska
Kansas
$1.38
$1.16
+3 cents
 
$1.18
Kansas
Missouri
$1.45
$1.45
-4 cents
 
$1.41
Missouri
Midwest Average
$1.33
$1.31
Unchanged
$1.31
Midwest Average

farm diesel heating oil futures spread chart

Add new comment