Article

Commodities: Cheese prices drop, so does Domino's stock

Overall, it was a fairly costly week for pizza operators' essential commodities, though ascending cheese prices returned to reality and the stock market reality was uncharacteristically harsh on Domino's value last week.

April 10, 2017 by S.A. Whitehead — Food Editor, Net World Media Group

It was a fairly costly week for commodities, although cheese prices did lend many restaurateurs a hand as the price corrected itself from its ascent in value the week before. Most other commodities were higher, with brands' stock market value mixed, though it was an uncharacteristically down week for Domino's Pizza in trading last week. 

Cheese
It was reality check time for cheese prices last week, as that momentary ascent in the commodity's value dipped back down again to a closing price of $1.46 at the close of the trading week. That followed last week's steady rise in cheese values to a high of $1.52 on March 31. 

Wheat:
Compared to the previous week, wheat prices were mixed last week as demand for U.S. wheat has held firm, although wheat fundamentals remain bearish. Weekly export sales for wheat came in at 24.1 mb (655,400 mt) with 20.9 mb (568,400 mt) for the 2016-2017 marketing year.  

Kansas City U.S. No. 1 Hard Red Winter, ordinary protein rail bid was 4 1/4 to 5 3/4 cents lower from $4.03- $4.68 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 2 to 3 cents higher from $4.03- $4.27 per bushel.

Minneapolis and Duluth U.S. No. 1 Dark Northern Spring, 14.0 to 14.5 percent protein rail, was 16 3/4 to 41 3/4 cents lower at $5.81 3/4- $6.06 3/4 per bushel. Portland U.S. Soft White wheat rail was 2 1/4 to 14 cents higher from $4.43 1/4- $4.80 per bushel.

Gasoline and diesel fuel

Gas and diesel are continuing to go for a substantially greater cost this year than last, with regular this morning come in at $2.39 nationally, up 6 cents from last week, 9 cents from last month and 36 cents from last year. 

Mid-grade and premium gas followed right in line with that of regular unleaded, with mid-rade gas up 36 cents from last year and premium up 37 cents over that same span. Diesel, however, isn't fluctuating as much over the course of the last week or month, but is a full 53 cents higher on average than last year at this same time, when we paid just $2.09 for a gallon of diesel. 

Natural gas

Natural gas spot prices rose at most locations this report week (Wednesday, March 29 to Wednesday, April 5). The Henry Hub spot price rose from $3.03 per million British thermal units (MMBtu) last Wednesday to $3.21/MMBtu yesterday.

At the New York Mercantile Exchange (Nymex), the April 2017 contract expired last Wednesday at $3.175/MMBtu. The May 2017 contract price increased to $3.266/MMBtu, up 4 cents from Wednesday to Wednesday.

Net injections to working gas totaled 2 Bcf for the week ending March 31. Working natural gas stocks are 2,051 Bcf, which is 17 percent less than the year-ago level and 15 percent greater than the five-year (2012–16) average for this week.

The natural gas plant liquids composite price at Mont Belvieu, Texas, rose by 25 cents, averaging $6.05/MMBtu for the week ending April 5. Spot prices for natural gasoline, ethane, and propane rose by 3, 7 and 6 percent, respectively. Spot prices for butane and isobutane remained flat week over week.

According to Baker Hughes, for the week ending Friday, March 31, the total natural gas rig count increased by 15, and it now stands at 824. The natural gas rig count is currently 72 units, or 82 percent, higher than at the start of April last year, and the oil-directed rig count is 300 units, or 83 percent, higher than last year.

Pizza company stocks
Last week's trading yielded a mixed bag of results. Domino's Pizza, for instance, had a relatively rough week, dropping $9.14 in share value from $184.30 at the close on March 31, down $175.16 at the end of trading last Friday. 

For multi-brand restaurant company and Pizza Hut parent, Yum Brands, stock prices actually picked up over the course of trading last week from $63.90 on Friday, March 31 to 64.28 at the closing bell last Friday. 

Meanwhile, Papa John's took a small hit in stock value, dropping to $79.55 last Friday at the close of trading. Meanwhile, take-and-bake brand, Papa Murphy's continues to do well, fetching $5.75 at Friday's close, up 98 cents from the closing bell the week before when this stock went for $4.77.

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.