Farm Fuels in Focus: Diesel and Propane up A Penny

Posted on 03/09/2017 10:25 AM

 

  • October 2016 natural gas opened today at $2.99 -- up 31 cents from our last Fuels in Focus.
  • Farm Diesel is 1 cent higher on the week at an average of $1.83 per gallon.
  • November 2016 WTI crude oil opened the day at $46.07 -- a nickel lower from our last report.
  • October 2016 Heating oil futures opened the day at $1.44 -- up 1 cent from our last report.
  • Propane is up a penny on the week at an average of $1.00 per gallon regionally.

disstussFarm Diesel -- Farm diesel firmed just slightly this week overall led by an 8 cent gain in Ohio and a 7 cent per gallon price hike in Iowa. Missouri, South Dakota and Nebraska were each up a couple of pennies. Five states in our twelve state survey were unchanged as Illinois fell 7 cents as Michigan fell a penny.

Heating oil futures will be on our radar as crude oil and heating oil futures remain rangebound in their sideways trading channels. Saudi Arabia has said they would cut crude oil production if Iran would agree to cut as well, but I do not believe Iran will cut oil production so soon after economic sanctions have been lifted -- before they even have a chance to take advantage of oil export revenues. If an OPEC production cut is actually enacted, crude oil prices will firm, but as we have said many times before, higher crude futures prices will bring more US crude production online which would immediately bat prices back down.

We have 100% of our diesel booked for harvest and while we expect short-term price strength, seasonally, we expect farm diesel to fall after harvest activity wanes, placing a seasonal low around Christmas.

  • Distillate inventories reported by EIA firmed 2.2 million barrels to 165.0 mmbbl. Stocks are currently 13.1 mmbbl above the same time last year.
  • The regionwide low currently lies at $1.69 in Illinois and the Midwest high is at $2.05 in Indiana.
Farm Diesel 9/23/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.79
$1.80
7 cents
$1.87
Iowa
Illinois
$1.76
$1.76
-7 cents
$1.69
Illinois
Indiana
$2.08
$2.05
Unchanged
$2.05
Indiana
Wisconsin
$1.92
$1.92
Unchanged
$1.92
Wisconsin
Minnesota
$1.94
$1.98
Unchanged
$1.98
Minnesota
South Dakota
$1.79
$1.79
3 cents
$1.82
South Dakota
North Dakota
$1.93
$1.94
Unchanged
$1.94
North Dakota
Nebraska
$1.71
$1.79
2 cents
$1.81
Nebraska
Missouri
$1.60
$1.67
3 cents
$1.70
Missouri
Kansas
$1.75
$1.86
Unchanged
$1.86
Kansas
Ohio
$1.75
$1.75
8 cents
$1.83
Ohio
Michigan
$1.84
$1.88
-1 cent
$1.87
Michigan
Midwest Average
$1.82
$1.85
1 cent
$1.86
Midwest Average

 

prstussPropane -- Eight of the twelve states in our weekly propane price survey are unchanged this week. Overall, LP firmed a penny regionally with an 11 cent price hike in Illinois leading gains and Nebraska up 2 cents. Meanwhile, Iowa fell 2 cents and Michigan softened a penny.

No change to our propane outlook except to say that persistent wet weather in areas nearly ready to harvest will mean increased demand for propane for grain drying. If you have not yet booked propane for such purposes, get on the stick and book 100% of harvest needs at current prices before demand adds short-term support.

  • According to EIA, last week, national propane inventories firmed 0.659 million barrels -- now 4.673 million barrels above the same time last year at 101.749 million barrels.
  • The regionwide low is at $0.85 per gallon in Nebraska and the regionwide high is in Ohio at $1.20.
LP 9/23/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$0.93
$0.91
-2 cents
$0.89
Iowa
Illinois
$1.05
$1.05
11 cents
$1.16
Illinois
Indiana
$1.15
$1.14
Unchanged
$1.14
Indiana
Wisconsin
$0.99
$0.99
Unchanged
$0.99
Wisconsin
Minnesota
$0.94
$0.91
Unchanged
$0.91
Minnesota
South Dakota
$0.95
$0.95
Unchanged
$0.95
South Dakota
North Dakota
$0.89
$0.89
Unchanged
$0.89
North Dakota
Nebraska
$0.81
$0.83
2 cents
$0.85
Nebraska
Missouri
$1.02
$1.02
Unchanged
$1.02
Missouri
Kansas
$0.96
$0.94
Unchanged
$0.94
Kansas
Ohio
$1.20
$1.20
Unchanged
$1.20
Ohio
Michigan
$1.10
$1.10
-1 cent
$1.09
Michigan
Midwest Average
$1.00
$0.99
1 cent
$1.00
Midwest Average

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