Farm Fuels in Focus: Diesel and Propane Unchanged

Posted on 03/09/2017 10:25 AM

 

  • March 2017 natural gas opened today at $3.19 -- down 17 cents from our last Fuels in Focus.
  • Farm Diesel is unchanged on the week at an average of $2.01 per gallon.
  • March 2017 WTI crude oil opened the day at $53.68 -- up 72 cents from our last report.
  • March 2017 Heating oil futures opened the day at $1.65 -- up 4 cents from our last report.
  • Propane is unchanged on the week to an average of $1.27 per gallon regionally.

inputsmonitor.com"Farm Diesel -- Eleven states were unchanged in our Midwestern farm diesel price survey. Only Iowa posted a change, down a penny per gallon on the week.

We added to 25% our spring farm diesel coverage this week bringing us up to 75% filled. Uncertainty revolving around the Trump administration's upcoming policy and production cuts enacted by OPEC and non-OPEC producers add upside risk to fuels. We had been targeting $2.00 per gallon as our line in the sand. We have been at $2.01 for three weeks now, and both heating oil and WTI futures have established a clear range. While diesel prices are not expected to firm sharply, we do believe the downside has been exhausted. Our advice to book another 25% for spring is an effort to manage upside risk and uncertainty while Midwestern prices are still fairly low.

The charts show that diesel has a proven tendency to firm through the upcoming months and into spring. We expect this year to be no different especially as world producers look to rebalance supplies and support higher returns on crude oil operations.

  • Distillate inventories reported by EIA firmed 1.6 million barrels to 170.7 mmbbl. Stocks are currently 11.0 mmbbl above the same time last year.
  • The regionwide low currently lies at $1.91 in North Dakota and the Midwest high is at $2.14 in Indiana.
Farm Diesel 1/27/17
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.98
$1.99
-1 cent
$1.98
Iowa
Illinois
$2.09
$2.05
Unchanged
$2.05
Illinois
Indiana
$2.22
$2.14
Unchanged
$2.14
Indiana
Ohio
$1.98
$1.98
Unchanged
$1.98
Ohio
Michigan
$2.07
$2.06
Unchanged
$2.06
Michigan
Wisconsin
$1.92
$1.92
Unchanged
$1.92
Wisconsin
Minnesota
$2.00
$2.04
Unchanged
$2.04
Minnesota
North Dakota
$1.90
$1.91
Unchanged
$1.91
North Dakota
South Dakota
$1.98
$1.98
Unchanged
$1.98
South Dakota
Nebraska
$1.97
$1.97
Unchanged
$1.97
Nebraska
Kansas
$1.93
$1.96
Unchanged
$1.96
Kansas
Missouri
$2.04
$2.07
Unchanged
$2.07
Missouri
Midwest Average
$2.01
$2.01
Unchanged
$2.01
Midwest Average

inputsmonitor.com

Propane -- Propane performed very much like farm diesel with eleven states unchanged. Only Minnesota moved this week, firming a penny per gallon.

Now is not the best time to top off propane. Prices will begin to erode as winter unwinds, but with roughly six weeks left of winter, we will remain in a period of heightened seasonal demand. If you are running low, top off with a few weeks worth and wait for prices to come back down before booking more aggressively.

  • According to EIA, last week, national propane inventories softened 5.564 million barrels -- now 15.438 million barrels below the same time last year at 62.648 million barrels.
  • The regionwide low is at $1.09 per gallon in South Dakota and the regionwide high is in Indiana at $1.65.
LP 1/27/17
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.09
$1.11
Unchanged
$1.11
Iowa
Illinois
$1.29
$1.40
Unchanged
$1.40
Illinois
Indiana
$1.52
$1.65
Unchanged
$1.65
Indiana
Ohio
$1.10
$1.10
Unchanged
$1.10
Ohio
Michigan
$1.35
$1.52
Unchanged
$1.52
Michigan
Wisconsin
$1.30
$1.30
Unchanged
$1.30
Wisconsin
Minnesota
$1.16
$1.20
1 cent
$1.21
Minnesota
North Dakota
$1.09
$1.10
Unchanged
$1.10
North Dakota
South Dakota
$1.09
$1.09
Unchanged
$1.09
South Dakota
Nebraska
$1.12
$1.12
Unchanged
$1.12
Nebraska
Kansas
$1.43
$1.47
Unchanged
$1.47
Kansas
Missouri
$1.18
$1.19
Unchanged
$1.19
Missouri
Midwest Average
$1.23
$1.27
Unchanged
$1.27
Midwest Average

 

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