Energy Market Update April 4, 2018
,Inc.
Energy Market Update April 4, 2018 NYMEX Prices Close May Crude Oil Crude Oil May Gasoline May Heating Oil May Natural Gas
$3.37 60 $1.9768 $1.9773 $2.718
Wk. Change -0.01 -0.0348 -.0375 +0.020
Market Comments: The energy markets closed mostly lower on Wednesday afternoon. Despite the overall tone in the DOE report being more bullish than anticipated, crude and diesel were still able to finish out the session lower, with gasoline clawing its way back to a positive settlement. The crude draw was larger than anticipated and the trade was looking for a build in gasoline stocks that did not materialize. However, the heightened tensions between the U.S. and China dominated the trade’s attention, as China in the overnight hours announced a plan to impose duties of up to 25 percent of 106 U.S. products. Crude Change DOE EST. Propane
API’s
-4.617
3Yr Avg. 425.3 462 +3.698/-2.00 Total
Gasoline
5 Yr. Avg. 462
Total +0.6 36.2 Crude -3.280 Cushing +4.058
3Yr Avg. -1.116 239.6 238.5 +0.500/-3.000 Change
Total
Distillate Fuel
5 Yr. Avg. 230
3Yr Avg. +0.537 129.5 134 +1.000/-3.000 Change
Total
Midwest -0.1 9.3
Gulf +0.7 22.9
Gasoline +1.123
Distillates +2.200
5 Yr. Avg. 133
The corn market put on a solid performance last week after the USDA reported that producers intend to plant more soybeans than corn for the first time in 35 years. In just one session the corn market gained 20 cents and took out the previous shortterm high of $4.12. This could certainly affect the corn market long term if estimated plantings materialize. The USDA estimated U.S. corn planting at 88.026 million and U.S. corn stocks at 2.127 billion bushels, down 7 percent from the previous year. Several factors would have to align just right, but there is the potential
for U.S. corn carryout could fall to a five year low in 2019. However, the corn market fell sharply early this morning on news of tariffs being imposed on U.S. commodities from China.
As we head into spring weather starts to take center stage. The 8 to 14 day forecast is calling for below normal temperatures across a large section of the Midwest, which could delay any early crop planting but will prolong the propane season. Typically corn planting progress by the end of April comes in around 39 percent; it will be interested to see where we are at the end of this April. In addition, moisture will be a key topic as the U.S. plains remained extremely dry and if rains to not materialize could drastically affect the winter wheat crop. There is a strong correlation between corn and wheat, so if wheat would surge on poor quality, it could pull corn prices higher too. U.S biodiesel production fell to 124 million gallons in January from 148 million gallons in December 2017. Biodiesel production from the Midwest Region accounted for 68 percent of the United States total production. Producer sales of biodiesel during January included 51 million gallons sold as B100 and additional 65 million gallons sold in biodiesel blends. Soybean oil remained the largest biodiesel feedstock, with 462 million lbs. used in January, or about 49 percent of the total. Propane Exports 2018 2017 2016
1st quarter of year (12 wks.) 857,667 barrels 1.201 mb 680,912 barrels
Annual average
Thus far in 2018, propane exports from the U.S. are 84% of exports in 2017 when 854,731 barrels comparing first quarters. If this trend 717,085 barrels continues it will allow the U.S. to build more stocks ahead of the 18/19 season than was the case for 17/18.
Energy Market Update April 4, 2018 NYMEX Prices Close May Crude Oil Crude Oil May Gasoline May Heating Oil May Natural Gas
$3.37 60 $1.9768 $1.9773 $2.718
Wk. Change -0.01 -0.0348 -.0375 +0.020
Market Comments: The energy markets closed mostly lower on Wednesday afternoon. Despite the overall tone in the DOE report being more bullish than anticipated, crude and diesel were still able to finish out the session lower, with gasoline clawing its way back to a positive settlement. The crude draw was larger than anticipated and the trade was looking for a build in gasoline stocks that did not materialize. However, the heightened tensions between the U.S. and China dominated the trade’s attention, as China in the overnight hours announced a plan to impose duties of up to 25 percent of 106 U.S. products. Crude Change DOE EST. Propane
API’s
-4.617
3Yr Avg. 425.3 462 +3.698/-2.00 Total
Gasoline
5 Yr. Avg. 462
Total +0.6 36.2 Crude -3.280 Cushing +4.058
3Yr Avg. -1.116 239.6 238.5 +0.500/-3.000 Change
Total
Distillate Fuel
5 Yr. Avg. 230
3Yr Avg. +0.537 129.5 134 +1.000/-3.000 Change
Total
Midwest -0.1 9.3
Gulf +0.7 22.9
Gasoline +1.123
Distillates +2.200
5 Yr. Avg. 133
The corn market put on a solid performance last week after the USDA reported that producers intend to plant more soybeans than corn for the first time in 35 years. In just one session the corn market gained 20 cents and took out the previous shortterm high of $4.12. This could certainly affect the corn market long term if estimated plantings materialize. The USDA estimated U.S. corn planting at 88.026 million and U.S. corn stocks at 2.127 billion bushels, down 7 percent from the previous year. Several factors would have to align just right, but there is the potential
for U.S. corn carryout could fall to a five year low in 2019. However, the corn market fell sharply early this morning on news of tariffs being imposed on U.S. commodities from China.
As we head into spring weather starts to take center stage. The 8 to 14 day forecast is calling for below normal temperatures across a large section of the Midwest, which could delay any early crop planting but will prolong the propane season. Typically corn planting progress by the end of April comes in around 39 percent; it will be interested to see where we are at the end of this April. In addition, moisture will be a key topic as the U.S. plains remained extremely dry and if rains to not materialize could drastically affect the winter wheat crop. There is a strong correlation between corn and wheat, so if wheat would surge on poor quality, it could pull corn prices higher too. U.S biodiesel production fell to 124 million gallons in January from 148 million gallons in December 2017. Biodiesel production from the Midwest Region accounted for 68 percent of the United States total production. Producer sales of biodiesel during January included 51 million gallons sold as B100 and additional 65 million gallons sold in biodiesel blends. Soybean oil remained the largest biodiesel feedstock, with 462 million lbs. used in January, or about 49 percent of the total. Propane Exports 2018 2017 2016
1st quarter of year (12 wks.) 857,667 barrels 1.201 mb 680,912 barrels
Annual average
Thus far in 2018, propane exports from the U.S. are 84% of exports in 2017 when 854,731 barrels comparing first quarters. If this trend 717,085 barrels continues it will allow the U.S. to build more stocks ahead of the 18/19 season than was the case for 17/18.
