Farm Fuels in Focus: Ruby Red Falls Short of Feb. High

March 11, 2014 07:06 AM
 

 

  • LP falls a full dime to $2.68 on the week.
  • April natural gas opened today at $4.65 3/4.
  • Farm Diesel up 3/4 cents at an average of $3.59 1/4 per gallon.
  • April WTI crude oil opened the day at $100.94.
  • At the open the WTI/Brent crude oil spread narrowed to $6.93 with April '14 Brent opening today at $107.87. Picture2

 

Propane --

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. Kansas led the way down and has been stable for the last three weeks running at $2.41. The Midwestern supply hub lies in Conway, KS and we are looking to Kansas to indicate the next leg lower.

Propane inventories reported by EIA last week had stocks moving higher, on course to rejoin the five-year average supply.

There is still a lot of snow on the ground, and a late winter prstusssnowstorm or cold snap is not out of the question. Last year we got snow in May in central Iowa. I do not expect to see propane take off like it did in the past few months, and the expectation is for supplies to begin to rebuild storage inventories. However, my father-in-law called from near Omaha last night and said the temperatures were around 70°F -- so maybe we are out of the woods.

The regionwide high is in $3.31 in Michigan with the low in Nebraska at $1.90.

 

LP 3/11/14
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$4.76
$2.28
$2.21
-$0.07
Illinois
$2.39
$3.10
$3.10
Unchanged
Indiana
$3.57
$3.29
$3.29
Unchanged
Wisconsin
$5.10
$3.34
$2.15
-$1.19
Minnesota
$4.62
$2.57
$2.65
+$0.08
South Dakota
$4.30
$2.99
$2.99
Unchanged
North Dakota
$3.02
$2.99
$3.02
+$0.03
Nebraska
$4.22
$1.99
$1.90
-$0.09
Missouri
$3.53
$2.50
$2.49
-$0.01
Kansas
$2.41
$2.41
$2.41
Unchanged
Ohio
$3.89
$2.69
$2.69
Unchanged
Michigan
$3.21
$3.31
$3.31
Unchanged
Midwest Average
$3.75
$2.78
$2.68
-$0.10

 Picture1

Farm Diesel --

Farm diesel firmed 3/4 cents this week to a regionwide average of $3.59 1/4 with 5 of the 12 states in our index unchanged. The biggest move was an 8 cent increase in Michigan to $3.75 with Minnesota falling 6 cents to $3.45. Other moves trended +/- 1 cent.

Farm diesel appears to have leveled off below last year's February high which bodes well for spring pricing. We had been watching heating oil as an indicator here and the March contract had reached as high as $3.18, but today, April heating oil opened at $2.96, and we expect the downtrend to continue. High export demand for distillate fuels will keep prices from falling too far, and national inventories are still well below the bottom end of the five-year average supply.

disstussWe are currently 50% filled on farm diesel for spring and Ruby Red's failure to breech last year's high suggests prices may begin to fall as early as next week. That would put us on course to take advantage of a late April low. We will restock at that point... stay tuned.

The regionwide low currently lies at $3.34 in Nebraska and the Midwest high is at $3.82 in Illinois.

 

Farm Diesel 3/11/14
Three Weeks Ago
Previous Week
Current Week
Change
Iowa
$3.40
$3.46
$3.46
Unchanged
Illinois
$3.78
$3.81
$3.82
+$0.01
Indiana
$3.72
$3.72
$3.72
Unchanged
Wisconsin
$3.71
$3.73
$3.74
+$0.01
Minnesota
$3.43
$3.51
$3.45
-$0.06
South Dakota
$3.49
$3.52
$3.52
Unchanged
North Dakota
$3.53
$3.54
$3.53
-$0.01
Nebraska
$3.61
$3.44
$3.43
-$0.01
Missouri
$3.26
$3.55
$3.56
+$0.01
Kansas
$3.31
$3.34
$3.34
Unchanged
Ohio
$3.79
$3.79
$3.79
Unchanged
Michigan
$3.52
$3.63
$3.75
+$0.08
Midwest Average
$3.54 1/2
$3.58 1/2
$3.59 1/4
+3/4 cent

 

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