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The Weekly Fill-Up | August 10-14

By the second week of August, the conversation around fuel and propane begins to change. Harvest is getting closer, propane contracting is underway, and producers are moving from summer maintenance into decisions that can directly affect fall operating costs.

For Sioux Valley Coop members, there is encouraging news in some markets, uncertainty in others, and a few areas where taking action now could make planning easier later.

Propane: Strong Inventories Meet Contracting Season

The propane supply picture has strengthened considerably over the summer. U.S. Energy Information Administration data showed national propane and propylene inventories approaching 100 million barrels by mid-July, while Midwest stocks had climbed above 23 million barrels. That continued inventory build is important because summer is when the industry positions supply ahead of grain drying and winter heating demand.

For eastern South Dakota customers, healthy inventories are a positive supply signal heading toward fall. They do not, however, guarantee where propane prices will go.

Weather remains one of the biggest unknowns. A cool fall can accelerate heating demand, while crop moisture levels at harvest can significantly influence how much propane is needed for grain drying across the Midwest. Export demand can also pull gallons away from domestic storage. Those variables make August an important planning month even when the current supply picture looks favorable.

That brings propane contracting into focus.

A propane contract is less about predicting the lowest possible market price and more about controlling uncertainty. Sioux Valley Coop customers have options including 100% prepay, no-money-down contracting, and consumption billing. For farms, businesses, and homeowners that already have a reasonable idea of their propane needs, contracting can make budgeting more predictable before fall and winter demand enter the market.

Customers interested in contracting should contact Sioux Valley Coop to discuss which option best fits their expected usage.

Diesel: Global Supply Is Sending Mixed Signals

Diesel markets are receiving competing signals this week.

On one side, China has eased refined-fuel export controls for a second consecutive month. Reuters reported that Chinese refiners received permission to increase August fuel exports, with refinery throughput also expected to rise. Additional refined product entering the global market could help relieve some of the tightness that affected diesel earlier this summer.

On the other side, Russian refined-product exports dropped sharply in July. Reuters reported a 33% month-over-month decline in Russian seaborne petroleum-product exports, driven partly by reduced refinery production and export restrictions. Russia has also extended restrictions on diesel exports through August.

Those developments matter because diesel is traded globally. More product coming from one major refining country can ease pressure, while lost supply elsewhere can work in the opposite direction.

Here at home, the latest EIA petroleum data continues to show U.S. refineries processing large volumes of fuel during the summer. For South Dakota agriculture, there is no indication of an immediate supply problem. The bigger consideration is what happens as summer diesel consumption overlaps with the beginning of harvest demand across the Midwest.

That makes bulk fuel planning particularly useful right now. Producers who know they will have substantial harvest needs can review storage capacity and expected usage before combines begin consuming fuel day after day.

Bulk Oil: Don’t Forget What Goes Into the Equipment

Fuel gets much of the attention before harvest, but the lubricants inside the equipment can be just as important.

August is a valuable time to review supplies of engine oil, hydraulic fluid, transmission and drivetrain lubricants, and grease. Combines, tractors, trucks, augers, and other harvest equipment will soon operate for long hours under heavy loads, heat, dust, and variable conditions.

The North American lubricant market has been comparatively stable from a supply standpoint, making availability less of a concern than during the major supply-chain disruptions experienced earlier in the decade. But lubricant costs still depend on base oils, additives, refining conditions, packaging, and transportation, meaning pricing does not necessarily follow diesel or crude markets directly.

For producers, the more practical consideration is inventory. Discovering you’re short on the correct hydraulic fluid or grease after equipment is already in the field creates an avoidable problem. Reviewing bulk oil and lubricant needs before harvest provides time to stock the products and quantities the operation actually uses.

It’s also important to use lubricants that meet the specifications required by each piece of equipment. The lowest-cost oil isn’t necessarily the lowest-cost decision if it doesn’t provide the protection required for modern engines and hydraulic systems.

What August Is Telling Us

The current markets offer a useful contrast.

Propane supply has been building steadily, creating a solid starting point as contracting season continues. Diesel remains readily available domestically, but international refined-fuel markets are still capable of changing quickly. Bulk oil and lubricant supplies are comparatively stable, making this a practical time to get maintenance inventory in place.

Weather will become increasingly important from here. Crop maturity and moisture will help determine fall grain-drying demand, while the timing and pace of harvest will influence regional diesel consumption. Longer-range NOAA outlooks are also pointing toward El Niño strengthening through the remainder of 2026, adding another factor to watch as fall and winter forecasts become clearer.

For Sioux Valley Coop members, August is ultimately about turning market information into a plan. Propane contracts can provide greater cost certainty. Bulk fuel planning can position an operation for harvest demand. And having the right lubricants on hand can help protect the equipment responsible for getting the crop out of the field.

The markets will continue to move. Being prepared means those movements don’t have to dictate the operation.