U.S. Midcontinent Diesel Fuel Tumbles on Lagging HarvestChristine Harvey
Spot diesel fuel in the U.S. Midcontinent slumped to the biggest discount in more than eight months as the slowest corn harvest in four years crimped farmers’ demand for the fuel.
Ultra-low-sulfur diesel in Group 3, the region spanning north from Tulsa, Oklahoma, to Minnesota and North Dakota, weakened 0.63 cent to 3 cents below futures on the New York Mercantile Exchange at 2:33 p.m., the largest discount since Jan. 25, according to data compiled by Bloomberg.
Demand for diesel, which usually peaks during the months from September to November when farmers use the fuel to power combines, is materializing slower this year as farmers wait to harvest crops planted late because of wet weather conditions, said Steve Mosby, vice president of supply consultant ADMO Energy LLC in Kansas City, Missouri.
The corn harvest was 12 percent complete on Sept. 27, the smallest amount for the time of year since 2009, according to U.S. Department of Agriculture data compiled by Bloomberg. Soybean collection was 11 percent done, compared with 41 percent last year, the data showed. Scheduled updates of the estimates are delayed because of the federal government’s extended shutdown.
The 3-2-1 crack spread in Group 3, a rough measure of refining margins based on West Texas Intermediate oil in Cushing, Oklahoma, dropped for the first time in five days. The differential fell 19 cents to $12.09 a barrel, according to data compiled by Bloomberg.