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Commodities: A good news-bad news kind of week

Commodity and pizza stock prices were a true blend of good and bad news last week with the bright spots in this week's report revolving around a plentiful cheese supply and healthy crude oil inventories.

July 9, 2018 by S.A. Whitehead — Food Editor, Net World Media Group

Commodity and pizza stock prices were a true blend of good and bad news last week with the bright spots in this week's report revolving around a plentiful cheese supply and healthy crude oil inventories.

Cheese

Cheese inventories are strong, according to the USDA Agricultural Marketing Service, with high demand during last week's Independence Day-shortened trading week. The closing price for barrels was $1.2450, compared to the previous Friday's closing price of $1.3900. The closing price for blocks was $1.5425, compared to $1.5550 the previous week.

Wheat

Compared to last week, cash bids for wheat were mostly higher, with an overall mild response to the tariffs of $34 billion from both, the U.S. and China that went into early Friday, according to the U.S.D.A.  World wheat production estimates are expected to drop slightly this week, but prices still remain bearish as global stocks are still plentiful. 

Overall, wheat was steady to 31 1/4 cents higher, with Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid at 31 1/4 cents higher, from $5.80 1/4-$5.95 1/4 per bushel. Kansas City U.S. No. 2 Soft Red winter rail bid was not quoted. 

St. Louis truck U.S. No. 2 Soft Red Winter terminal bid was 21 cents higher, from $5.15-$5.30 per bushel.  Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, has no comparison price at $6.87 1/2 per bushel. Portland U.S. Soft White wheat rail was steady, from $5.80-$5.90 per bushel.

Vehicle fuel

Generally, the array of vehicle fuel choices — from regular gasoline to E85 — is trending downward for the last four weeks, which AAA attributes to an increase in overall crude inventory for U.S. markets. Most grades of fuel were up slightly from last week's prices, but still down 6 cents or more from the prices we paid last month. 

Regular gas came in right around $2.87 a gallon this morning, compared to $2.86 last week and $2.93 last month. That was the story for all grades of gasoline, as well as diesel and E85, which came in at 3 to 4 cents lower than last month at $3.17 and $2.41 respectively. All fuels and grades were, however, well above the prices we paid last year at this time when a gallon of regular was selling at $2.26, more than 60 cents below the current average. 

Natural gas

Natural gas spot prices rose at most locations for the report week that ended Wednesday, June 27. The Henry Hub spot price rose from $2.95 per million British thermal units (MMBtu) to $3.00/MMBtu over that same period.

At the New York Mercantile Exchange. the July 2018 contract expired yesterday at $2.996/MMBtu. The August 2018 contract price increased to $2.981/MMBtu, up 2 cents Wednesday to Wednesday.

Net injections to working gas totaled 66 billion cubic feet (Bcf) for the week ending June 22. Working natural gas stocks are 2,074 Bcf, which is 26 percent lower than the year-ago level and 19 percent lower than the five-year (2013-17) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, fell by 3 cents, averaging $8.33/MMBtu for the week ending June 27. The price of propane and isobutane fell by 2 and 7 percent, respectively. The price of natural gasoline, ethane, and butane rose by 1, 5 and 2 percent, respectively.

According to Baker Hughes, for the week ending Tuesday, June 19, the natural gas rig count decreased by six to 188. The number of oil-directed rigs fell by one to 862. The total rig count decreased by seven, and it now stands at 1,052.

Pizza stock prices

The bleeding continued for pizza stocks on the markets over the shortened trading week, with half of the brands monitored by this site losing value over the four days of activity. Domino's, for instance, took another punch to the gut, closing Friday at $279.15, down $3.02 from the previous week's close and $13.24 over the last two weeks. 

Meanwhile, Pizza Hut parent, Yum Brands, did manage to gain a few cents last week, up 5 cents on the week to close Friday at $78.27. Papa John's also posted a gain for the week, closing Friday at $51.27, up 55 cents from the previous week's close. Finally, take-and-bake brand, Papa Murphy's lost about 45 cents in value last week, closing Friday at $5.10. 
 

Photo: iStock

About S.A. Whitehead

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Pizza Marketplace and QSRweb editor Shelly Whitehead is a former newspaper and TV reporter with an affinity for telling stories about the people and innovative thinking behind great brands.