Weekly Farm Fuels Bulletin | WTI Supports Higher Diesel, LP

Posted on 05/22/2018 4:19 PM

 

Farm Dieselfarm diesel price chart

  • Farm diesel firmed a few cents on the week led by gains in Nebraska.
  • June WTI crude oil futures opened at $72.53 this morning. Fund managers are reportedly trimming long positions but are not yet giving up on the upside.
  • June heating oil futures are a greater concern at $2.28 (noon CT) as strength in heating oil will lead directly to strength in farm diesel. According to the nine-day relative strength index, heating oil futures are slightly overbought, but that condition is more likely going to be remedied by time rather than a price slump.
  • We see significant upside risk in farm diesel prices as we still consider current prices a value compared to the rest of the petroleum product markets. If you are running low after planting and related activities, it might be prudent to top off propane price chartat current prices.

Propane

  • Propane prices firmed this week as well led by Kansas.
  • Adding support was WTI crude oil and general firmness in petroleum product markets.
  • The offseason may not be quite the bonanza we have come to expect. With LP exports and crude oil futures on the rise, propane now appears poised to price itself somewhere around $1.30 regionally at the low. Bulk buyers will find better deals than that, but raw retail -- which is what your Inputs Monitor tracks -- will be elevated.

Fuel
5/7/18
5/14/18
Week-over Change
Current Week
Fuel
Farm Diesel
$2.41
$2.46
+2 cents
$2.48
Farm Diesel
LP
$1.36
$1.39
+2 cents
$1.41
LP

Our farm diesel/heating oil futures spread compares the weekly average retail farm diesel price with front-month heating oil futures as of the close on the previous Friday. A move below the "line in the sand" indicates pending upside risk. A move above our "line in the sand" indicates downside potential.

farm diesel heating oil futures spread chart


 

 

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