Monday, September 1, 2014
Spot propane at Mont Belvieu and Conway, Kan. headed a bit higher Thursday compared to the Monday email Update, but just fractionally. Belvieu values were up a half cent to 0.625 cents, while Conway gained a half cent, bringing the Midwest trading hub to 1.25 cents under Texas. Market watchers note that, until recently, Conway propane had consistently traded at a premium to Mont Belvieu. Following June, a month that showed weak inventory builds in the Heartland, concerns arose about a repeat of last season’s supply woes due to forecasts for yet another bumper corn harvest.
In its most recent forecast, the U.S. Department of Agriculture has this fall’s crop above 14 billion bushels, the largest on record. But, for now, Midwest propane inventories stand about 3.6 MMbbl above last year, and with the harvest yet to arrive, Conway propane values have fallen under Mont Belvieu. While there is some sentiment that the current warm weather will reduce the likelihood of another heavy crop drying season similar to last year, it’s just too early to tell. And if USDA’s corn production forecast holds true, analysts believe the region may face yet another propane price shock.
Mont Belvieu non-LST propane mid-morning Thursday was trading at 101.75-102.00 cents/gal., higher by 0.625 cents for buyers and a half cent for sellers compared to Monday. Low and high deals done were reported at 101.875 and 102.25 cents. LST spots, at 101.75-102.25 cents/gal., were up a half cent for buyers and sellers, with low and high trades at 102.00 and 102.75 cents.
The Group 140 (Conway) bid and offer was at 100.50-101.50 cents/gal. for a gain of a half cent for buyers and 0.75 cents for sellers over the week. One deal had been posted as of mid-morning at 101.00 cents.
Hattiesburg spots stood at a wide 102.50-106.50 cents/gal., and rose 1.875 cents for buyers and a nickel for sellers compared to Monday. However, no trades had been reported as of mid-morning Thursday, leaving the bid and offer untested.
On the Canadian side, spots dipped over the week. Edmonton spots, at 70.00-70.75 cents/gal., were off 0.75 cents for buyers and 4.25 cents for sellers. Sarnia spot propane Thursday was trading at 105.00-105.75 cents/gal., down a penny for buyers and sellers from Monday.
In its most recent forecast, the U.S. Department of Agriculture has this fall’s crop above 14 billion bushels, the largest on record. But, for now, Midwest propane inventories stand about 3.6 MMbbl above last year, and with the harvest yet to arrive, Conway propane values have fallen under Mont Belvieu. While there is some sentiment that the current warm weather will reduce the likelihood of another heavy crop drying season similar to last year, it’s just too early to tell. And if USDA’s corn production forecast holds true, analysts believe the region may face yet another propane price shock.
Mont Belvieu non-LST propane mid-morning Thursday was trading at 101.75-102.00 cents/gal., higher by 0.625 cents for buyers and a half cent for sellers compared to Monday. Low and high deals done were reported at 101.875 and 102.25 cents. LST spots, at 101.75-102.25 cents/gal., were up a half cent for buyers and sellers, with low and high trades at 102.00 and 102.75 cents.
The Group 140 (Conway) bid and offer was at 100.50-101.50 cents/gal. for a gain of a half cent for buyers and 0.75 cents for sellers over the week. One deal had been posted as of mid-morning at 101.00 cents.
Hattiesburg spots stood at a wide 102.50-106.50 cents/gal., and rose 1.875 cents for buyers and a nickel for sellers compared to Monday. However, no trades had been reported as of mid-morning Thursday, leaving the bid and offer untested.
On the Canadian side, spots dipped over the week. Edmonton spots, at 70.00-70.75 cents/gal., were off 0.75 cents for buyers and 4.25 cents for sellers. Sarnia spot propane Thursday was trading at 105.00-105.75 cents/gal., down a penny for buyers and sellers from Monday.
