Time to Talk Propane

Posted on 08/06/2020 5:55 PM

 

We are fast approaching the time to pull the trigger on harvest and winter propane supplies. I mention this below in the propane bullets, but our price this week is 7% below the same time last year. Your local bid should match that, or be better.eia propane supply chart According to our data, propane prices tend to flatten for a few weeks before taking one last dip to the downside. This week is the beginning of that dip. Sometimes that dip has gone on for a few weeks, other years have seen that last only two weeks.

We are watching propane prices closely and as soon as the market hints at beginning its annual trek higher for the winter season, we will advise you book harvest and winter supplies. If you have a bid in hand from your preferred retailer, give them a call and see if you can get another few cents per gallon knocked off the price. My best advice is to check you propane price from last year, and compare that to this year's local price. If you could make it work last year, you will likely be able to make it work again this year, especially if dryness continues across corn country through harvest.

I have given you my best thoughts in this post on booking propane for harvest and winter, but I would add there are a few nuggets in the pages of the Pro Farmer Newsletter this week -- out Friday afternoon. I delivered a full page on my fertilizer and fuels near-term outlook so give that a look, and be ready to book propane in the next few weeks.Farm diesel price chart

Farm Diesel --

  • Our regional average farm diesel price rose 5 cents this week.
  • The eastern Belt states had a tough week with Indiana and Ohio each up 23 cents per gallon. Iowa added 15 cents and North Dakota and Michigan each firmed a penny on the week. Kansas diesel fell 6 cents per gallon.
  • According to EIA, national distillate stocks firmed 1.6 million barrels on the week, now 42.5 million barrels above the same time last year and well above the top edge of the five-year average supply range.
  • September heating oil futures are three cents higher from last Thursday's close to today's at $1.25 as of the close on Thursday August 6.
  • September WTI crude oil futures closed Thursday August 6, up $2.09 on the week.
  • According to our spread analysis, the retail farm diesel price has overdone it to the upside, and downside propane price chartpotential is building (see chart below).

Propane --

  • Our regional average propane price fell 3 cents per gallon to $1.06.
  • All states were either lower or unchanged on the week.
  • Indiana led LP to the downside, falling 20 cents per gallon as Ohio fell 4 cents and three others dropped a penny.
  • According to EIA, national propane supplies rose 2.039 million barrels, now 7.452 million barrels above the same time last year and right at the top end of the five-year average range.
  • We recommend you look for a local propane bid around 7% below the same time last year when considering booking for harvest and winter.

Fuel
7/20/20
7/27/20
Week-over Change
Current Week
Fuel
Farm Diesel
$1.52
$1.62
+5 cents
$1.67
Farm Diesel
LP
$1.09
$1.09
-3 cents
$1.06
LP

heating oil futures/farm diesel price spread

 

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