Exploring the Energy Market

Mar 27, 2023


The energy market is continuing its volatility as we enter 2023. There are no longer days when energy markets would be somewhat predictable with moderate changes. It is not uncommon to see over ten cent changes daily in diesel fuels.
 
 Managing energy risks is more important than ever to the coop and our customers. Customers should take advantage of forward contracting options to limit risk and lock in acceptable margins. Additionally, our AFD (Automatic Fuel Delivery) program enables average daily pricing based on monthly consumption, which minimizes pricing risk and volatility. 
 
Long-term crude and diesel forecasts released by the U.S. Energy Information Administration (EIA) have indicated a softening in crude and diesel pricing. However, as we have experienced over the last couple of years, we are only a significant event away from continued volatility.  The most recent significant event was the unforeseen banking collapses which drove crude prices to levels not seen since December 2021. 
 
The EIA has noted that global inventories will increase due to the production of liquid fuels to an average of 102.8M barrels per day in 2024 versus 100M barrels per day in 2022. Ongoing concerns related to the Russian invasion of Ukraine, global economic conditions, and Chinese demand will provide uncertainty in the energy forecasts. The basic economic theory of increased supply and reduced demand equals lower prices will remain to be seen.
 
 
 

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May 13, 2024
Cedar/Scott County, Iowa
Eastern Iowa has been able to get the majority of the crop in the ground in between rain showers. Planting progress is sitting roughly 90% on corn and 60%-70% on soybeans. Early planted corn emerged in 7-10 days thanks to warm temps and ample moisture. One thing to watch this spring is insects and disease pressure being higher than usual due to the mild winter. We have seen that firsthand in our alfalfa crop locally with the alfalfa weevil causing early season damage before the first cutting. Make sure to scout your hay crop if you haven’t and contact your local rep if a insecticide application is needed. 
Apr 29, 2024
Cedar/Scott County, Iowa

Eastern Iowa had busy week of planting and herbicide application last week. Estimating about 40% of corn and 20% of soybeans were planted in the last seven days. Over the weekend the area received anywhere from 1-1.5” of rain which should help activate any herbicide that was applied. Not sure if planters will get back in the field before we receive some more forecasted moisture. I imagine we will see some plants emerge this week with warmer temps.
Apr 15, 2024
4/15/2024

Cedar/Scott County, Iowa

Temperatures have come back to the mean after March, which was ahead of schedule. We haven't had a day in April that has been more than 10⁰F above normal. We have received some much-needed moisture in the last couple of weeks. Soil temperatures have growers thinking about planting, but not many wheels have turned so far. The forecast for moisture this week will most likely keep growers out of the field and hoping for better days ahead. This spring's weather has been very conducive for fertilizer and NH3 applications, which has helped growers and retailers be as prepared as possible heading into planting season.

 
Apr 03, 2024
4/1/24
Regional Crop Update

Sperry, Iowa
     The last few weeks have been cold and wet in southeast Iowa with a considerable amount of rain and temperatures dipping below freezing most nights. The cold has pushed back on any thoughts of an early spring, but if it warms up next week planters will be rolling on the lighter ground. The moisture is a much-needed relief to a dry soil profile but if it doesn’t start to dry in the next two weeks the conditions will be unfavorable for planting. With the mild and wet winter we experienced in southeast Iowa fields are turning green earlier with a lot of grasses and winter annuals coming in with a vengeance. Early burndowns are a hot topic due to the volume of weed pressure.
 
Jan 16, 2024
 
River Valley Cooperative’s priority is to keep our customers safe and comfortable. With the current stretch of winter weather and cold temperatures, we understand that you may be worried, but our energy department is closely monitoring tanks.