Climate Change Speeds Up U.S. Harvest, Giving Oil Unlikely Lift
(Bloomberg) -- American farmers are preparing to fire up their tractors earlier than usual this year, and it’s an unexpected gift to oil markets.
Unusually hot and dry weather has sped up crop development, and corn and soybean fields should be ready for harvesting several weeks earlier than normal. The value of diesel, the tractor fuel for the harvest, rose more than 12% since Aug. 20 in the Chicago and Tulsa, Oklahoma, cash trades.
The extra demand for diesel is giving oil markets a lift in what has been an inconsistent recovery from the pandemic slump. Diesel consumption is also being helped by the online order boom.
About 41% of the U.S. corn crop is “denting,” or nearing maturity, up from the normal 38% at this time of year. North Dakota, hard hit by the drought, has 23% of the crop denting, up from the normal 16%.
“It’s been hot, sunny and windy, things corn and beans love,” said Steve Mosby, a refined products broker at Admo Energy in Kansas City, Missouri. He said diesel prices in the Midwest appear to be coming up from lows for the year.
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