Farm Fuels Bulletin | Diesel Shows Signs of Bottoming

Posted on 02/08/2019 12:00 PM

Farm Fuels Bulletin | Diesel Shows Signs of Bottoming

Farm Dieselfarm diesel price chart

  • Farm diesel fell a penny regionally this week to an average of $2.30 per gallon.
  • Ohio was our sole decliner, falling 11 cents per gallon. Four states were 1 to 2 cents higher with 7 states unchanged.
  • Below, we have thoughts from two market watchers on crude oil and heating oil futures. The first is from Todd Horowitz from bubbatrading.com who talks about the relationship between crude and the dollar. The second is from Pro Farmer's own Dan Vaught who takes a look at heating oil futures. Both spoke to Chip Flory on AgriTalk Radio earlier this week.
  • In general, this week's price action in retail farm diesel suggests a near-term bottom may be forming. Note this week's regional average is 12 cents per gallon below the same week last year. If diesel worked for you at last year's price, at this week's price, it should fit in to your production budget similarly. But now is likely the time to act by checking with your preferred retailer and booking spring/summer diesel at current rates.
  • According to EIA, national distillate stocks fell 2.3 million barrels in the week ended Feb. 1, now 2.8 million barrels below the same time last year, at the mid-point of the five-year average range.

 

 

 

 

propane price chart

Propane

  • LP is unchanged regionally this week and well below the three-year average for this week.
  • All states in our survey were unchanged on the week with the exception of Nebraska which softened a penny per gallon on the week.
  • With the recent cold snaps across the Midwest, I would remind propane users to keep very close tabs on on-farm supplies, and remain diligent if you are due for a top-off.
  • According to EIA, national propane stocks fell 2.363 million barrels in the report week, but remain 8.580 million barrels above the same time last year.

Fuel
1/21/19
1/28/19
Week-over Change
Current Week
Fuel
Farm Diesel
$2.32
$2.31
-1 cent
$2.30
Farm Diesel
LP
$1.42
$1.42
Unchanged
$1.42
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.

This week, our spread analysis indicates mild upside risk for retail farm diesel.


farm diesel heating oil futures spread chart

 

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