Farm Fuels in Focus: Diesel and LP Each Down 2 Cents

Posted on 03/09/2017 10:25 AM

 

  • September 2016 natural gas opened today at $2.66 -- up 13 cents from our last Fuels in Focus.
  • Farm Diesel is 2 cents lower on the week at an average of $1.78 per gallon.
  • September 2016 WTI crude oil opened the day at $48.33 -- higher $4.87 from our last report.
  • September 2016 Heating oil futures opened the day at $1.52 -- up 14 cents from our last report.
  • Propane is 2 cents lower on the week at an average of $0.96 per gallon regionally.

diesel"Farm Diesel -- Farm diesel was lower across the board this week. Four of the twelve states in our retail price survey are unchanged. The charge lower, which amounted to a 2 cent per gallon decline overall, was led by Missouri, down 14 cents, Michigan down 12 cents and dime declines in Kansas and Iowa. We are waiting for the market to confirm a price floor has been reached before we pull the trigger for fall diesel.

We expect diesel prices to firm through harvest and to offer lower prices by Christmas. There is a lot of chatter in the petroleum markets lately and investors and fund managers are buying the hype. That has forced WTI futures higher and pulled heating oil along with it. We discuss some of this and explain why we have not yet booked diesel for harvest in a post in the Inputs Monitor from earlier today. Click here to read the post.

  • Distillate inventories reported by EIA firmed 1.9 million barrels to 153.1 mmbbl. Stocks are currently 4.7 mmbbl above the same time last year.
  • The regionwide low currently lies at $1.60 in Missouri and the Midwest high is at $1.92 in Wisconsin.
Farm Diesel 8/19/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$1.80
$1.71
-9 cents
$1.70
Iowa
Illinois
$1.84
$1.84
Unchanged
$1.84
Illinois
Indiana
$1.91
$1.88
-3 cents
$1.88
Indiana
Wisconsin
$1.92
$1.92
Unchanged
$$1.92
Wisconsin
Minnesota
$1.88
$1.85
-3 cents
$1.86
Minnesota
South Dakota
$1.77
$1.77
Unchanged
$1.77
South Dakota
North Dakota
$1.83
$1.78
-5 cents
$1.77
North Dakota
Nebraska
$1.78
$1.76
-2 cents
$1.71
Nebraska
Missouri
$1.74
$1.74
Unchanged
$1.60
Missouri
Kansas
$1.79
$1.79
Unchanged
$1.69
Kansas
Ohio
$1.84
$1.84
Unchanged
$1.84
Ohio
Michigan
$1.85
$1.76
-9 cents
$1.73
Michigan
Midwest Average
$1.83
$1.80
-2 cents
$1.78
Midwest Average

LP

Propane -- Propane acted in much the same way as diesel this week, falling an unlikely 2 cents per gallon at this late date in the season. U.S. propane supplies continued to firm last week according to EIA. We had advised propane users to book for home heat at the bids retailers were offering over the past few weeks. At that time, we had also advised that those in the mood to gamble on lower propane prices for confinement operations and grain drying should wait for a September swoon. This week's price action looks a lot like a late season swoon and this week's price should be an opportunity to fill remaining needs for LP on the farm that we should consider.

Five of the twelve states in our retail propane price survey are unchanged on the week with no state posting a higher price. Nebraska and North Dakota led to the downside falling 7 and 6 cents per gallon respectively. Missouri is down 4 cents as Iowa slipped 2 cents lower. Minnesota, Kansas and Michigan are all down a penny per gallon on the week. When we book our fall diesel, given the timing is right, we will issue "hard advice" to book remaining LP needs. But for now, if the market wants to fall, we are willing to let it.

  • According to EIA, last week, national propane inventories firmed 1.841 million barrels -- now 0.122 million barrels below the same time last year at 93.744 million barrels.
  • The regionwide low is at $0.80 per gallon in North Dakota and the regionwide high is in Kansas and Indiana at $1.08.
LP 8/19/16
Three Weeks Ago
Previous Week
Change
Current Week
 
Iowa
$0.93
$0.92
-1 cent
$0.91
Iowa
Illinois
$0.99
$0.99
Unchanged
$0.99
Illinois
Indiana
$1.08
$1.08
Unchanged
$1.08
Indiana
Wisconsin
$0.99
$0.99
Unchanged
$0.99
Wisconsin
Minnesota
$0.93
$0.92
-1 cent
$0.92
Minnesota
South Dakota
$0.95
$0.95
Unchanged
$0.95
South Dakota
North Dakota
$0.86
$0.86
Unchanged
$0.80
North Dakota
Nebraska
$0.89
$0.91
2 cents
$0.82
Nebraska
Missouri
$1.06
$1.06
Unchanged
$1.02
Missouri
Kansas
$1.09
$1.11
2 cents
$1.08
Kansas
Ohio
$0.93
$0.93
Unchanged
$0.93
Ohio
Michigan
$1.07
$1.05
-2 cents
$1.06
Michigan
Midwest Average
$0.98
$0.98
-2 cents
$0.96
Midwest Average

 

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