Farm Fuels in Focus: LP Retraces Spike

March 31, 2014 08:17 AM
 

 

  • LP falls 23 cents to $2.09 on the week.
  • May '14 natural gas opened today at $4.48.
  • Farm Diesel falls 7 cents to an average of $3.49 per gallon.
  • May '14 WTI crude oil opened the day at $101.69.
  • At the open the WTI/Brent crude oil spread narrowed $1.59 on the week to $6.17 with May '14 Brent opening 61 cents higher on the week at $107.86.

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Picture5

Propane --

LP continues to slide lower, just two cents above the price from the third week in January before the parabolic spike, nearly completing the retracement of the winter's upside swing. Michigan led the way down dropping 79 cents on the week. Four of our twelve states are unchanged and the others all moved lower.

Each year we see the low in July and will take advantage of the seasonal price break to bolster supplies for what could be a similar winter of 2014-'15. But forward booked supplies will likely betray strong demand and may support pricing above that of last summer. Be prepared to jump in when the time is right -- but that is a few months off yet. We will keep you posted.

Propane inventories reported by EIA last week decreased 0.583 million barrels (mmbl) to 25.658 mmbbl. Stocks remain 15.189 mmbbl below the same time last year.

The regionwide high is at $2.69 in Ohio and the regionwide low is currently shared by Nebraska & Kansas at $1.60.

LP 3/31/14
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$2.18
$2.16
$1.88
-$0.28
Illinois
$2.70
$2.65
$2.09
-$0.56
Indiana
$2.90
$2.51
$2.43
-$0.08
Wisconsin
$2.15
$2.10
$1.85
-$0.25
Minnesota
$2.41
$2.35
$1.89
-$0.46
South Dakota
$2.09
$2.09
$2.09
Unchanged
North Dakota
$2.09
$2.07
$2.07
Unchanged
Nebraska
$1.83
$1.83
$1.60
-$0.23
Missouri
$2.55
$2.55
$2.47
-$0.08
Kansas
$2.41
$1.60
$1.60
Unchanged
Ohio
$2.69
$2.69
$2.69
Unchanged
Michigan
$3.31
$3.31
$2.52
-$0.79
Midwest Average
$2.44 1/4
$2.32
$2.09
-$0.23

 

Farm Diesel -- Picture4

Farm diesel softened 7 cents this week to a regionwide average of $3.49 with 3 of the 12 states in our index unchanged. The biggest move was a 38 cent decrease in Wisconsin to $3.32 with Michigan shucking 20 cents to $3.43. Other moves trended +/- six cents with the trend pointed lower.

The vertical ascent that elevated propane pricing was lost on farm diesel, and, thankfully, so far home heating oil looks to have made it out of the woods with affordable pricing intact. That will limit farm diesel pricing, and the chart indicates farm diesel is basically on course with last year. The suggestion is that prices will continue to fall through early spring and we will look to fill remaining needs then.

The regionwide low currently lies at $3.32 in Wisconsin and the Midwest high is at $3.81 in Indiana once again this week.

Farm Diesel 3/31/14
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$3.46
$3.45
$3.39
-$0.06
Illinois
$3.81
$3.79
$3.77
-$0.02
Indiana
$3.66
$3.83
$3.81
-$0.02
Wisconsin
$3.73
$3.70
$3.32
-$0.38
Minnesota
$3.44
$3.43
$3.38
-$0.05
South Dakota
$3.56
$3.56
$3.54
-$0.02
North Dakota
$3.63
$3.62
$3.62
Unchanged
Nebraska
$3.39
$3.39
$3.33
-$0.06
Missouri
$3.41
$3.41
$3.41
Unchanged
Kansas
$3.36
$3.38
$3.37
-$0.01
Ohio
$3.79
$3.57
$3.57
Unchanged
Michigan
$3.63
$3.63
$3.43
-$0.20
Midwest Average
$3.57 1/4
$3.56
$3.49
-7 cents

 

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