Farm Fuels in Focus: Prices Head South For Spring

March 17, 2014 07:52 AM
 

 

  • LP falls 24 cents to $2.44 on the week.
  • April '14 natural gas opened today at $4.50.
  • Farm Diesel falls 2 cents to an average of $3.57 1/4 per gallon.
  • April '14 WTI crude oil opened the day at $99.39.
  • At the open the WTI/Brent crude oil spread widened nearly a full dollar on the week to $7.86 with April '14 Brent opening today at $107.25.

 

Propane -- Picture2

LP continues to slide lower -- a welcome sight after the parabolic chart action we saw in weeks previous. Warmer weather and supply relief are to thank for the lower prices. The Dakotas led the way down falling a good 90 cents each. Up to a few inches of snow came as a surprise to those who got it on Saturday, but the first official day of spring is Thursday and while that really is just a notch on the calendar, it is progress we will gladly take. We expect LP prices to continue to fall through July -- at least we hope that's the case.

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 isprstuss a few months off yet. We will keep you posted.

Propane inventories reported by EIA last week had stocks falling slightly, but supplies have rejoined the bottom of the five-year average range and warmer weather will help rebuild stocks, and mitigate price volatility.

The regionwide high is at $3.31 in Michigan with the low in Nebraska at $1.83.

 

LP 3/17/14
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$2.28
$2.21
$2.18
-$0.03
Illinois
$3.10
$3.10
$2.70
-$0.40
Indiana
$3.29
$3.29
$2.90
-$0.39
Wisconsin
$3.34
$2.15
$2.15
Unchanged
Minnesota
$2.57
$2.65
$2.41
-$0.24
South Dakota
$2.99
$2.99
$2.09
-$0.90
North Dakota
$2.99
$3.02
$2.09
-$0.93
Nebraska
$1.99
$1.90
$1.83
-$0.07
Missouri
$2.50
$2.49
$2.55
+$0.06
Kansas
$2.41
$2.41
$2.41
Unchanged
Ohio
$2.69
$2.69
$2.69
Unchanged
Michigan
$3.31
$3.31
$3.31
Unchanged
Midwest Average
$2.78
$2.68
$2.44
-$0.24

 

Farm Diesel -- Picture1

Farm diesel softened 2 cents this week to a regionwide average of $3.57 1/4 with 2 of the 12 states in our index unchanged. The biggest upward move was a 10 cent increase in North Dakota to $3.63 with Missouri falling 15 cents to $3.41. Other moves trended +/- a few 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 $3.36 in Kansas and the Midwest high is at $3.81 in Illinois.

Farm Diesel 3/17/14
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$3.46
$3.46
$3.46
Unchanged
Illinois
$3.81
$3.82
$3.81
-$0.01
Indiana
$3.72
$3.72
$3.66
-$0.06
Wisconsin
$3.73
$3.74
$3.73
-$0.01
Minnesota
$3.51
$3.45
$3.44
-$0.01
South Dakota
$3.52
$3.52
$3.56
+$0.04
North Dakota
$3.54
$3.53
$3.63
+$0.10
Nebraska
$3.44
$3.43
$3.39
-$0.04
Missouri
$3.55
$3.56
$3.41
-$0.15
Kansas
$3.34
$3.34
$3.36
+$0.02
Ohio
$3.79
$3.79
$3.79
Unchanged
Michigan
$3.63
$3.75
$3.63
-$0.08
Midwest Average
$3.58 1/2
$3.59 1/4
$3.57 1/4
-2 cents

 

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