ALERT 1/15/2014: Farm Diesel

January 15, 2014 07:45 AM

  • Get current with 50% spring farm diesel coverage. Picture1
  • Average regionwide price currently at $3.35 1/2/gallon, up 2 1/2 cents this week.
  • Trends suggest annual seasonal low established.


Farm Diesel -- Farm diesel looks poised to reverse and placed a telltale hook in the weekly price chart on Monday. Trends suggest this is the annual winter runup in pricing and we recommend booking a portion for spring at current prices. Another predicted spate of cold weather will continue to pressure distillate supplies in the form of home heating oil and threatens to elevate regional farm diesel pricing.

The forecast for frigid temperatures has heating oil in high demand. Export demand for distillate fuelsdisstuss is high and the current national supply is behind year-ago and well below the five-year average. Last week we said, "If your appetite for risk can handle it, hold off until the chart signals a reversal. We will alert you when it does". Here is the reversal we were talking about.

We are currently at 20% on farm diesel for spring. Growers should protect against price increases by booking another 30% for spring to bring total coverage up to 50%. Last year we got another setback in late April, and we will look to increase coverage to 100% at that time.

Inputs Position Monitor
Farm Diesel
Natural gas
Spring 2014 30% 20% 20% 20% 30% 30% 20%-40% 50% 0% 0%
Fall 2014

Prices may vary so, as always, check with your preferred supplier.

Distillate chart provided by EIA

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