Weekly Farm Fuels Bulletin | Heating Oil Futures Inject Diesel Risk

Posted on 12/27/2017 1:29 PM

 

Farm Dieselfarm diesel chart

  • Farm diesel prices were mostly unchanged this week with Minnesota off 11 cents per gallon.
  • Iowa posted our only gains, adding just a penny.
  • As the mercury dropped, heating oil futures surged above $2.00, suggesting a near-term rise in farm diesel prices.
  • Heating oil futures are currently overbought according to the nine-day relative strength index which presages a technical, corrective round of sales. We will look to book farm diesel shortly after that event.
  • February WTI crude futures are nearing overbought territory, but traders are less willing to buy crude on cold weather which may keep WTI at or below key $60.

Propanepropane price chart

  • Most price moves in the propane segment were to the upside, which is not surprising since temperatures have cooled sharply in the Midwest.
  • But the current cold snap is not reflected in this week's survey, so we expect next week to feature another move to the upside.
  • In addition to cold weather, propane demand will also be supported by ongoing grain drying and for confinement operations.
  • We continue to advise users stay on top of on-farm stocks and caution not to allow supplies to run out as local supplies may run thin in certain areas in the event of a major demand push.

Fuel
12/11/17
12/18/17
Week-over Change
Current Week
Fuel
Farm Diesel
$2.33
$2.32
-1 cent
$2.31
Farm Diesel
LP
$1.44
$1.47
+3 cents
$1.48
LP

diesel heating oil futures spread


 

 

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